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Investing.com -- The yield on Germany’s 10-year benchmark bond has risen, surpassing a peak reached last week. This comes as investors anticipate a significant increase in spending and borrowing. The yield has grown by four basis points, reaching 2.93%, a level not seen since October 2023. This month’s rise totals 53 basis points, marking the largest increase over a two-year span. The yield is now nearing the crucial 3% mark, a threshold that hasn’t been surpassed in nearly a year and a half.
The value of German debt has seen a significant drop following the announcement of Berlin’s plan to release hundreds of billions of euros for defense and infrastructure investment. This initiative is led by the country’s potential future chancellor, Friedrich Merz.
The Green party, one of the political groups in Germany, initially rejected Merz’s extensive fiscal reform package in its existing state. However, the party indicated its readiness to reach a consensus as early as this week, a move which has resulted in German bonds falling to new lows.
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