LONDON (Reuters) – German government bond futures fell sharply on Tuesday, while stock futures rose and the euro rallied after two main German political parties agreed to debt brake reform and a 500 billion euro infrastructure fund.
Germany’s Bund futures turned sharply lower on the news, which came after the close of European markets. They were last down 1%.
German and European stock futures, which had fallen earlier in the day on U.S. tariff worries, rose. German Dax futures were last down 1.5% on the day after the benchmark Dax index closed down 3.5%.
The conservatives and the Social Democrats agreed to seek a loosening of Germany’s debt brake to allow higher defence spending, and proposed the creation of a 500 billion euro ($529 billion) infrastructure fund, their leaders said.
The euro also rallied sharply on the news and was last up 1% at $1.0595. It was 0.4% higher against sterling.
(Reporting by Alun John; editing by Dhara Ranasinghe)
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