05:53 AM EST, 02/21/2025 (MT Newswires) -- Commerzbank in its "European Sunrise" note of Friday highlighted:

Markets: United States Treasuries recover in Asia after weakening into New York close while stocks recover. Japanese government bonds spike on Bank of Japan comments. E-minis softer in Asia, China rallies. DXY zigzags, oil and gold softer overnight Thursday.

Fed: Elon Musk says he mulls checking the Federal Reserve with DOGE. Federal Reserve Governor Adriana Kugler says Fed has "some way" to go before achieving the 2% objective, upside risks remain. St. Louis Federal Reserve President Alberto Musalem sees increased risk of inflation "stalling above 2%." Atlanta Fed President Raphael Bostic expects two cuts in 2025, but "there's a lot that is going to happen that could influence that really in both directions."

Ukraine: The U.S. objects to the phrase "Russian aggression" in G7 statement on Ukraine (FT). President Volodymyr Zelenskiy tweets that Ukraine is ready for a "strong, effective investment and security agreement with the President of the United States," says meeting with U.S. envoy for the war in Ukraine Keith Kellogg "restores hope." The U.S. has given Ukraine a new draft of the minerals deal. U.S. National Security Advisor Mike Waltz says Zelenskiy needs to come back to the table, says the U.S. welcomes European security guarantees. Polish Prime Minister Donald Tusk calls for Ukraine aid to be financed "from Russian frozen assets."

==EUROPE:

Germany: Forschungsgruppe Wahlen sees CDU/CSU fall to 28%, followed by AFD (20%). Linke climbs to 8%, FDP below 5%. Linke, BSW agree in rejection of weapon exports, NATO and increased defense spending in German TV.

Defense: French President Emmanuel Macron wants the European Union to revamp its defense strategy and boost military autonomy over the next 5-10 years. United Kingdom military chiefs have advised PM Keir Starmer to increase defense spending to 2.5% of gross domestic product before 2030.

EU trade chief Maros Sefcovic is optimistic after U.S. talks with top trade officials including Howard Lutnick and Kevin Hassett, says the EU is upping liquefied natural gas purchases, sees willingness in the U.S. to mutually reduce tariffs. EU denies the claim to have offered lowering auto-tariffs repeated by President Donald Trump.

BMW says it needs no custom tariff deal with the U.S., would be the largest exporter of U.S.-made cars by value.

Italy: BTP Piu sovereign bond orders amount to 1.7 billion euros on the fourth day and 13.8 billion euros cumulatively, compared with an average of 15 billion euros after four days in the previous four issues.

==ASIA:

Japan: The BoJ would "flexibly increase" JGB purchases to "promote stable formation of interest rates" in "exceptional cases" where long-term rates rise sharply (Governor Kazuo Ueda).

China: Finance minister vows more proactive fiscal policy to support the economy, including higher fiscal deficit and more issuance of government bonds.