LIVE MARKETS-Europe before the bell: Futures higher, markets set for defence boost

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EUROPE BEFORE THE BELL: FUTURES HIGHER, MARKETS SET FOR DEFENCE BOOST

European equity futures are higher on Monday, with defence names set for a boost after European leaders agreed on Sunday to lift defence spending and draw up a peace plan for Ukraine.

European leaders met in Britain and concluded that defence spending would need to increase, with European Commission President von der Leyen suggesting the bloc could ease rules that limit debt levels.

That is set to give defence names another boost on Monday, with bellwether Rheinmetall RHMG.DE up 15% in pre-market. Other names in the sector .SXPARO, such as BAE Systems BAES.L, Leonardo LDOF.MI and Thales TCFP.PA, are called to open higher by at least 7%.

Euro STOXX 50 futures .STXEc1 are up 0.4%, while futures in Frankfurt FDXc1, London FFIc1 and Paris FCEc1 up between 0.1% and 0.5%.

Germany could be at the heart of Europe's defence splurge after reports at the weekend suggested the parties in talks to form the next government, the CDU/CSU and SPD, are considering setting up two special funds, worth hundreds of billions of euros each, for defence and infrastructure spending.

Tariffs also remain in focus, with U.S. levies on Canadian and Mexican imports set to come into force from Tuesday.

(Samuel Indyk)

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