(Bloomberg) – As European bonds decline and defense company stocks have gathered for the potential for an increase in military spending, the government could force borrowing over the next few years.
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German, French and Italian bonds all fell, reaching their 10-year remaining (benchmark borrowing rate for the Euro region) reached a high in more than two weeks. The European Stoxx 600 index rose 0.2%, led by the defence name, and Germany’s Rheinmetall AG jumped 6%. Goldman Sachs Group Inc.’s European Defense Equity Index exceeded record highs. The US market is closed on holidays.
Authorities are working on a major new package to strengthen defence spending, with some EU leaders planning to meet in Paris on Monday, beginning to elicit their response. The move comes as the US quickly ends the war in Ukraine and Vice President JD Vance attacked longtime European allies at a security meeting on Friday.
“The goal post is changing and the EU is aware that it can rely on the US less and less on the border to protect its borders,” said Aneeka Gupta, head of Macro Research at Wisdomtree UK Ltd. It is stated in.
This development solidified the view that debt sales should increase as European countries become responsible for the costs of lasting peace agreements between Ukraine and Russia. Bloomberg economy estimates that defense upgrades and Ukraine’s major powers could cost another $3.1 trillion over a decade.
European stocks are also supported by greater optimism towards China, the main export market. Investors have gained technology share, especially in China, amid DeepSeek’s optimism about AI apps. Monday’s meeting with President Xi Jinping and business figures, including e-commerce icon Jack Ma, was also seen as a catalyst for profit.
The Goldman Sachs Group Inc. strategist has raised the target of the MSCI China Index on optimism about the country’s technological advances. Since November, Asian stock gauges have risen 0.4% after reaching previous highest levels.
In the currency market, the Japanese yen has been strengthened against all peers in the group of 10 after gross productive material data was enhanced beyond expectations for hiking interest from Japanese banks. Bloomberg’s dollar index traded steady after a two-day loss.
