German Debt Has Worst Day Since Aftermath of Berlin Wall’s Fall
- Investors brace for big increase in German defense investment
- Prospects of stronger economic growth fuel a rally in the euro
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German bonds suffered their worst day since the months following the fall of the Berlin Wall on an historic spending plan that will unlock hundreds of billions of euros for defense and infrastructure investments.
The yield on the nation’s 10-year bonds recorded its biggest jump since March 1990, up 30 basis points, after chancellor-in-waiting Friedrich Merz outlined a sweeping fiscal overhaul late on Tuesday. The last time benchmark bond yields surged so much, West Germany and East Germany were about to reunify as the Cold War drew to a close.