European stocks rally at the open and bund yield turns positive on report of joint European Union spending

European stocks enjoyed an unusually strong open on Tuesday after a weak Wall Street finish, after a report the European Union will consider jointly issuing bonds to finance energy and defense spending.

The Stoxx Europe 600 SXXP,
+ 1.10%
gained over 1% in early action, as the French CAC 40 PX1,
+ 2.11%
gained 2.5%, the German DAX DAX,
+ 1.37%
rose 1.8% and the UK FTSE 100 UKX,
+ 0.29%
rose 0.6%.

Bloomberg News reported the EU will unveil a plan this week for joint spending after leaders hold an emergency summit in Versailles. The report said officials are still working out how much money they intend to raise. The joint fund raising would be the second pan-EU spending plan after the NextGenerationEU package to repair the damage from the COVID-19 pandemic.

The yield on the 10-year German bund TMBMKDE-10Y,
0.060%
shot up 9.5 basis points to 0.08%.

US stock futures responded positively to the European open, with futures on the S&P 500 ES00,
+ 0.30%
rising 0.4% after a 3% nosedive for the index SPX,
-2.95%
on Monday in the wake of US Secretary of State Anthony Blinken saying allies were considering a ban on Russian oil imports.

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