08:46 AM EDT, 06/09/2025 (MT Newswires) -- Canada's curve Monday may be vulnerable to underperformance as the defense spending math sinks in, said Scotiabank.

Global equity benchmarks are flat to slightly lower across most of North America and Europe as Asia-Pacific markets rallied while catching up to Friday's solid payrolls report in the United States, especially considering a large estimated dent from weather, pointed out the bank. Sovereign bond yields are a few points lower across the U.S. and eurozone government bond curves, with the United Kingdom front-end slightly underperforming.

Canada is set to announce a major increase in defense spending Monday and key will be how it is funded and the likely amount of debt issuance, noted the bank. Prime Minister Mark Carney will make the formal announcement at 10 a.m. ET, then tour a military facility at noon ET, and then hold a press conference at 1 p.m. ET.

The Globe and Mail is reporting that Canada will rapidly expedite its plan to increase defense spending by hitting 2% this fiscal year instead of over five years from now and then target further subsequent increases. This is ahead of a NATO summit on June 24-25, when Secretary-General Mark Rutte has said he expects members to raise military spending to 3.5% of GDP plus 1.5% on related security measures for a total of 5%, added Scotiabank.