06:41 AM EDT, 10/20/2025 (MT Newswires) -- Commerzbank in its "European Sunrise" note of Monday highlighted:

Markets: United States Treasuries closed at the lows on Friday, remain on the backfoot in Asia. Asian stocks and e-minis rebound. OAT future declines around 30 ticks. Euro (EUR) stabilizes above $1.166. Oil and gold rangebound.

Fed: St. Louis Federal Reserve President Alberto Musalem "could support" another rate cut if further risks to the labor market emerge and risks for persistent inflation remain contained.

Trade: President Donald Trump says the U.S. will "be fine" with China before trade talks resume.

Russia-Ukraine war: Trump urges Russia and Ukraine to "make a DEAL" and to "stop right now at the battle lines." He also urged Ukrainian President Volodymyr Zelenskiy to accept Russian President Vladimir Putin's terms to end war (FT).

==EUROPE:

ECB: European Central Bank President Christine Lagarde says fiscal policy "will play a more supportive role in the years ahead," with "agent of change Germany -- who would have thought?" In separate interview Lagarde says the world has "yet to feel the pain" from U.S. tariffs.

ECB: Governing Council (GC) member Joachim Nagel says "inflation story looks good, we are pretty much on our target for the next years." GC member Pierre Wunsch says ECB shouldn't react to small deviations from 2% inflation goal. GC member Martin Kocher sees equal chance for cut or hike as next move. GC member Piero Cipollone says digital euro will reduce Europe's dependencies. GC member olli Rehn urges joint financing of European defense spending.

BoE: Bank of England Governor Andrew Bailey says Brexit remains a drag on growth for the foreseeable future. Policymaker Megan Greene says once-a-quarter cutting pace is no longer appropriate, while she "doesn't think that rate cutting cycle is over."

France: S&P downgrades France to A+/stable from AA-/negative in unscheduled move, as "budget consolidation over forecast horizon will be slower than previously expected." Finance Minister Roland Lescure says "we cannot ignore" the third downgrade in less than a year, "it's a call for lucidity and responsibility."

Ratings: DBRS upgrades Italy to A (low)/stable from BBB (high)/positive. S&P affirms Greece at BBB/stable. Scope affirms Hessen at AAA/stable.

EU leaders are increasingly confident to reach agreement on frozen Russian assets by end of the year (Guardian). Lagarde says common approach is vital.

==ASIA:

China: Central bank (PBoC) leaves loan prime rates unchanged. GDP grew slightly stronger than expected in Q3 (4.8% year over year versus 4.7% consensus). Industrial production also better than expected.

Japan: LDP reaches coalition deal, setting up Sanae Takaichi to become prime minister.