Market Information Thursday 6 March 2025

German borrowing costs surged to their highest one-day increase since 1997, driven by a major fiscal agreement to boost military and infrastructure spending aimed at enhancing economic growth. The plan involves creating a €500bn off-balance sheet vehicle and adjusting borrowing limits, pending parliamentary approval and Green party support. This development has led to higher bond yields and positive reactions in stock markets, particularly benefiting infrastructure and defense sectors.

For the first time in decades, the private equity industry’s assets under management fell by 2% last year as investors hesitated amid a backlog of unsold deals. Fundraising dropped significantly due to reduced asset sales and cash returns, causing large pension funds and endowments to withdraw. The industry faces ongoing challenges, with low liquidity and declining fees, making a quick recovery unlikely.

An EU parliamentary think-tank is exploring using exchange traded funds (ETFs) to boost investment in European defense companies, aiming to create a fund focused solely on the region. Current European defense ETFs, like VanEck’s, have significant US exposure, prompting discussions to increase European content possibly with EU seed investments. Interest in defense ETFs has surged amid increasing defense spending, though ethical and diversification challenges persist in forming a purely European-focused fund.

The 6M Euribor increased with 1 basis point to 2.34% compared to previous business day. The 10Y Swap increased with 23 basis points to 2.64% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.