Bond market extends selloff after seismic German spending pledge

Reuters ^ | March 6, 20259:05 AM ES | Marc Jones

[Miami Rebel]

LONDON, March 6 (Reuters) - World financial markets kept on a radical readjustment course on Thursday after U.S. President Donald Trump's shakeup of the transatlantic relationship spurred a seismic, half-a-trillion-euro shift in German defence and infrastructure spending. The European Central Bank cut its interest rates again, as expected, and said monetary policy was becoming less restrictive, which traders took to mean another cut in April might not be a given - giving the euro another boost.

That would normally suck up traders' attention. But it was just one of a myriad factors in play, with a global bond market selloff still in full swing a day after the 10-year German Bund yield - a major driver of worldwide borrowing costs - saw its biggest rise since the 1990s. Those Bund yields were up 6 basis points at 2.847%, having jumped as high as 2.929% Wednesday. The euro rose by as much as 0.5% after the decision to a 4-month high of $1.0845 , while European stocks (.STOXX) also took a breather after a 10% rally this year.

"The reality is that I still don't think the enormity of the (German) news has got close to being fully comprehended and digested by global investors yet," said Deutsche Bank's Jim Reid, who estimated that Wednesday's Bund yield spike was the biggest move since German reunification in 1990.

The global implications had been evident overnight. Japan's 10-year government bond yield had hit a near 16-year high, while the U.S. 10-year Treasury note yield was climbing again in early U.S. trading despite rising bets on more Federal Reserve rate cuts following recent patchy data there.

Focus also remained on the global trade war after 25% U.S. tariffs on imports from Mexico and Canada were imposed on Tuesday along with fresh duties on Chinese goods.

[Owen]

Cryocooling is not cheap.

The numbers are from the energy bible of BP. 13B cubic meters of natgas in LNG form last year.

The AI says Plaquemines will have eventual capacity for 27 Mtpa. Million tons per annum. The conversion is 1 million tons of LNG is 1 billion cubic meters of gas. So the entire facility dedicated only to Germany and nothing to other customers who are already paying for shipments today could cover the 16 Bcm German loss of consumption since 2021.

My read is US consumption and sheer capacity to produce more than the 1.1 Tcm/yr in place now will leave these LNG terminals substantially under used.

As for $70+ billion invested, at. . . 6%? With 2% inflation? Gonna be hard to achieve even a 20 yr payback.