(Reuters) – German shares are strengthening on Tuesday in mid -session while the sovereign yields of Germany rebound, after the vote in the Bundestag of a reform of the debt to debt and the creation of a public financing fund.
The Bundestag gave its green light on Tuesday to a historic reform of debt to debt in Germany in order to allow a massive increase in loans to support military spending and stimulate the growth of the first European economy, confronted, like the rest of the EU, with commercial and geopolitical tensions since the return of Donald Trump to the presidency of the United States.
The lower room of the outgoing parliament also validated the creation of an infrastructure fund with 500 billion euros.
Investors believe that these projects will help support growth and inflation in the first European economy.
At 3:08 p.m. GMT, the Dax advances 0.72% to 23,320 points, close to its session record reached on March 6 (23,475 points).
The SDAX, the index of small and medium -sized enterprises which are more sensitive to the national situation, advances by 2.22%, to a higher in three years.
If the actions greet more important debt prospects, the German sovereign yields bounce back, the bond markets are concerned with an increase in German debt and are worried about permanently higher inflation.
In fact, the markets now believe that the central bank would lower its rates only two times by the end of the year, before starting to raise its rates from February 2026.
The yield of the borrowing at 10 years from Germany takes 1.5 base points at 2.818%, remaining close to its highest levels since October 2023.
BNP Paribas estimates that this return could reach 4%, a higher since 2008, as the country will issue the debt necessary for the financing of its projects, and whose volume by 2028 is estimated at 150 billion euros.
The euro could reach $ 1.20 in the next three years, the bank estimates, against $ 1.09 on Tuesday.
(Written by Corentin Chappron, edited by Blandine Hénault)
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