European Markets Surge Amid Defense Spending Boost and Crypto Frenzy

European shares and the euro soared as EU leaders draft a Ukraine peace plan amidst Zelenskiy-Trump tensions. Defense a priority, boosting arms stocks. Bitcoin surged after Trump's U.S. crypto reserve reveal, reviving market interest. Economic outlook uncertain with looming tariff threats and central bank meetings.

European shares and the euro surged on Monday following a decisive agreement among regional leaders to develop a Ukraine peace plan. This move comes after a tense meeting between President Volodymyr Zelenskiy and President Donald Trump, where leaders recognized the need for increased defense spending, boosting European arms stocks significantly.

Market confidence in defense sectors surged, causing shares of companies like Rheinmetall, Leonardo, and BAE Systems to rise by 11% to 15%. Meanwhile, the euro climbed nearly 1% against the U.S. dollar. Bitcoin also captured attention by surging 20%, following Trump's announcement of a new strategic cryptocurrency reserve.

Expectations for central banks' responses to geopolitical challenges remain uncertain, with the European Central Bank anticipated to lower rates. Concurrent U.S. tariff threats on Canada, Mexico, and China heightened economic concerns, as traders brace for economic data and cues from Federal Reserve officials and upcoming U.S. payroll reports.

(With inputs from agencies.)