The European stocks started the week near flat, while German companies gave back early gains, boosted by the idea – hope – that the new German government will relax spending rules and announce a special defence spending budget that could go up to 200bn euros to take its own security in its own hands for the first time since the WWII. Every penny spent on defence is one less penny spent elsewhere, and the latter could accelerate rotation toward the European equities.
The worsening geopolitical and trade outlook boost appetite for safer pockets of the market. The US yields and gold advance to fresh record. In energy, US crude extends rebound after approaching the critical $70pb support last Friday on news that Trump government imposed new sanctions on oil brokers and ships that were linked to illicit Iranian crude. But the worsening global economic outlook on rising trade tensions will...
