05:46 AM EDT, 03/27/2025 (MT Newswires) -- Commerzbank in its "European Sunrise" note of Thursday highlighted:

Markets: Bund future is up on United States President Donald Trump's tariff announcement, Dax future is down and auto makers lead Nikkei lower. U.S. Treasuries move sideways in late New York session and Asia. E-minis start to recover some of Wednesday's losses. EUR drops sharply, then recovers, trades at $1.078. Brent stabilizes below $74/barrel.

Fed: St. Louis Federal Reserve President Alberto Musalem is skeptical about whether tariff-induced inflation will be temporary. He sees no urgency to lower interest rates and expects inflation to take longer to fall to 2%.

U.S.: Atlanta Fed GDPNow indicates 1.81% contraction in Q1.

U.S. tariffs: Trump signs proclamation to implement 25% tariffs on cars and parts not made in the U.S. as of next Wednesday. Adds that more tariffs are coming if the European Union works with Canada against the U.S. Trump says reciprocal tariffs will be "very lenient." Trump may reduce duties on China to secure TikTok deal.

U.S.: The Congressional Budget Office warns that U.S. Treasury's ability to borrow will probably be exhausted in August or September unless the debt limit is increased.

Ukraine: Treasury Secretary Scott Bessent repeats that "everything is on the table" while French President Emmanuel Macron says that it's too early to remove sanctions and Russia cannot dictate European support to Ukraine.

==EUROPE:

EU: Trade Commissioner Maros Sefcovic expects U.S. tariffs on European Union goods of about 20%. The EU prepares to respond via an anti-coercion instrument.

Bundesbank says that a 20% tariff would result in clearly lower German growth.

ECB: European Central Bank Governing Council member Mario Centeno sees no reason to pause in April, adds that new projections may be needed to pause. GC member Martins Kazaks says rate cuts can continue if baseline holds, uncertainty is high amid geopolitics.

France: 2024 budget deficit at 5.8% versus earlier estimate of 6%.