German Markets Surge on Fiscal Reform Optimism

European stock markets, led by Germany, saw significant gains due to optimism surrounding Germany's parliamentary approval of a substantial fiscal package. This package includes a €500 billion fund for infrastructure and climate initiatives, as well as increased defense spending, driving the DAX to record highs. The measures have been backed by Germany's major political parties and await final approval from the Bundesrat. The fiscal reforms are seen as a pivotal shift towards greater economic flexibility, allowing Germany to surpass its usual spending limits. Market reactions have included a rally in defense stocks, while the euro has strengthened against the dollar. Additionally, investors are closely monitoring the potential for a Ukraine peace deal discussed in a call between US and Russian leaders.