Germany's 10-Year Bond Yield Hits New High

Germany's financial markets reacted strongly as the 10-year bond yield reached a peak of 2.72% on Wednesday, marking the highest level since November 2023.

Fiscal Reforms Spark Market Movements

The surge in bond yields comes in the wake of significant fiscal reforms announced by Chancellor-in-waiting Friedrich Merz and coalition partners. Key measures include revising the constitutional debt brake to allow defense spending to exceed 1% of GDP and proposing a €500 billion infrastructure fund aimed at stimulating the economy over the next decade.

Market Reaction

Following the announcement, the 10-year bond yield experienced a notable increase, peaking at 2.66% by 9:09 am CET, reflecting the market's response to the proposed fiscal adjustments.