German Bond Selloff Reignites as Merz Strikes Debt Package Deal
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The selloff in Germany’s bonds spilled over to a second week as Chancellor-elect Friedrich Merz won crucial political backing for a debt-funded spending package to boost defense and infrastructure.
Longer-dated bonds took the brunt of the weakness, with the 10-year yield rising as much as eight basis points on Friday to 2.94%. It’s now within touching distance of the 3% milestone last breached in 2023.