EU defense spending plans support the region's corporate markets and euro – Reuters

As reported by Reuters, the weakening of ties between the United States and Europe makes EU countries more attractive to investors. Thus, the growing number of deals by with European assets was highlighted by Mark Dowding, IT director of RBC's BlueBay fixed income group.

Brussels' plan to allocate up to 800 billion euros ($866 billion) for defense modernization and Germany's fiscal expansion mean that stocks of companies in this segment remain an attractive opportunity for investors, the agency pointed out. European aerospace and defense stocks have gained 33% this year. Citi estimates that their expected average annual earnings growth through 2028 will range from 8% to 32%.

Other market participants quoted by Reuters, including Evli portfolio manager Thomas Hildebrandt, expect positive dynamics not only for defense companies, but also in the segments of logistics, communications and telecommunications.

At the same time, as the agency notes, the pool of AAA-rated bonds supporting the euro's status as a reserve currency will be expanded in the near future. Germany's unprecedented spending on infrastructure and defense may lead to an increase in debt by more than a trillion euros.