(BFM Stock Exchange) – The flagship index of the Paris Stock Exchange took 1.56% this Wednesday, March 5, invigorated by the advertisements of massive expenditure of Germany in defense and infrastructure. And to a lesser extent, by the hope of attenuation of American customs duties.

With historical decision, historical session (or almost). The CAC 40 rebounded this Wednesday, March 5, resuming 1.56% at 8,173.75 points.

The flagship index of the Paris Stock Exchange was propelled by Germany which decided to loosen the budget vice to strengthen its defense and its infrastructure. And thus relaunch an economy that has been vacillating for two years now.

The Dax 40 also signed an increase of 3.7% on Monday.

The CDU-CSU (Conservatives) and the SPD (Socialist), the parties in charge of forming the future government coalition as a result of the legislative elections, announced that hundreds of billions of euros will be invested in these two areas.

The two parties predict, in the case of the defense, to reform the German mechanism known as the “debt brake” which limits the federal budget deficit to 0.35% of German GDP and 0% at the level of the regions (“Länder”). Deutsche Bank talks about expenses up to 400 billion euros.

The leaders also announced a “agreement” on a gigantic public subsidy plan to improve the country’s infrastructure and competitiveness. A special fund of 500 billion euros must be voted with this in mind.

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German rates fly away

For Barclays, German announcements are “a game to change” for Europe. Capital Economics believes that the next German government could announce measures representing 1 to 2 GDP points over the next two years.

The consequence on the debt market is that yields on German obligations have soared, recording unpublished increases for three decades. The rate on the 10 -year title has increased from around 2.5% to 2.77% or an increase of 0.28 percentage points, a dizzying figure on a single session. According to AFP, German rates at 10 years have signed its highest increase since reunification in 1990.

The euro flies to him against the dollar and takes 1.3% against the greenback to go back to $ 1.0769, supported by Germany’s announcements on its budgetary expenses which should stimulate the economy of the euro zone.

To a lesser extent, the CAC 40 was also supported by the prospect of a softer position of the United States on customs duties towards Canada and Mexico. US Secretary of Commerce Howard Lux, said on Bloomberg on Wednesday that some sectors could be spared. He had previously mentioned the possibility of compromise.

Alstom leaps, oil plunges

On the values ​​side, the actions most affected by German announcements have taken off. This was the case for defense groups. Thales took 7.6% and Dassault Aviation gained 4.3%.

ArcelorMittal took 10%, the group achieving 10% of its income in Germany. Construction is logically concerned by Germany’s desire to modernize its infrastructure. Saint-Gobain took 8.8%.

Alstom flew by 15%, the market anticipating German decisions to modernize its rail network whose dilapidation is unfortunately very well known.

The oil plunges, still shaken by the announcement, on Monday, members of the Organization of the Exporting Petroleum Exporters (OPEC) and their allies to carry out a gradual increase in their production from April. To worsen the situation, the American energy agency announced a much stronger increase than expected crude stocks in the United States last week. Which throws a shadow on American demand.

The May contract on the Brent de Mer du Nord plunges 3.6% to $ 68.51 a barrel while the April that on the WTI listed in New York cedes 4.2% to 65.39 Dollars per barrel.