After a week marred by the largest flight to safety across assets since the financial crisis, markets broadly reversed course after Der Spiegel* reported that Germany, Europe's largest economy, would be open to running a budget deficit if they went into a technical recession (two simultaneous quarters of negative GDP). This stance from Germany's finance minister, Olaf Scholz, is remarkable due to prior hesitancy to engage in fiscal stimulus.
The Euro Stoxx 600 index rose as much as 1.3% after the release of the story, and every European market was in positive territory. In the U.S., all three major stock indexes reported gains: 1.1% for the DJIA, 1.3% for S&P 500, and 1.5% for NASDAQ.
After an historic week of safe haven flows to treasuries and gold, yields rallied by 6 basis points, reversing the course of the week. Gold spot retraced 1%, and Brent crude was up 0.75%.
*a link to the English version of the Der Spiegel article is not available at time of writing
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