(Bloomberg) -- German bonds led gains in the region on Wednesday as the approval of a landmark spending package provided some relief to investors, who are now turning their attention to how fast the measures will be implemented.

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Benchmark 10-year yields fell as much as seven basis points to 2.75%, the lowest in two weeks, also boosted by global demand for safe assets. The rate reached 2.94% last week before paring the move as traders said the expected fiscal boost was widely priced in, and bonds were becoming attractive.

Investors are now looking for clues on how fast lawmakers will implement Chancellor-elect Friedrich Merz’s plan to turbocharge public spending. The package, which was approved in the Bundestag on Tuesday, unlocks hundreds of billions of euros in debt financing for defense and infrastructure. It’s expected to pass another vote at the Bundesrat — where Germany’s 16 federal states are represented — on Friday.

“Markets will need to elaborate further the real impact of the package, repricing implementation risks, the ability to spend the funds and how fast all the change will happen,” said Annalisa Piazza, fixed income research analyst at MFS Investment Management. She expects yields to consolidate around current levels in the near-term.

Bunds sold off when the spending plans were announced two weeks ago, as investors prepared for more borrowing from Europe’s largest economy. The 10-year yield surged the most since Germany’s reunification and neared the 3% milestone. Longer-term, yields could be heading as high as 4% — a level not seen since the global financial crisis in 2008, according to BNP Paribas SA strategist Sam Lynton-Brown.

But for now, analysts say yields may drift lower, particularly if signs emerge that the increase defense and infrastructure spending is slow to take off. Risks posed to the German and euro area economy more broadly are also likely to dominate as US President Donald Trump prepares to implement trade tariffs from April 2.

The bill means defense spending in excess of 1% of gross domestic product — roughly €45 billion ($49 billion) — will be released from constitutional borrowing restrictions, while a special, off-budget infrastructure fund will be empowered to borrow as much as €500 billion over 12 years.

“The market shift has been quite significant and immediate,” said Amelie Derambure, senior multi-asset portfolio manager at Amundi SA. “We need to see the effects first and see how things evolve in terms of growth and and inflation.”