Defense Spending Prospects Weigh on European Bonds: Markets Wrap
Published On Feb 18, 2025, 5:25 AM
European stocks are close to record highs, as expectations of increased defense spending boost military-related stock prices. Yields on European bonds are rising due to these expectations, with particular growth seen in German and British bonds. This uptick in yields is influenced by a strong jobs market and wage growth in the UK, alongside ongoing tensions regarding the war in Ukraine. Advancements in defense stocks, such as Rheinmetall and Dassault Aviation, highlight the sector's growth potential. Attention is also being diverted to the upcoming Federal Reserve's interest rate decisions, adding further context to market dynamics.
Stock Forecasts
BND
Negative
As bond yields rise due to increasing spending expectations, bonds may lose value in the short term. Investors may shy away from bonds amidst fears of inflation and rising costs.
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