(fxcue news) - German stocks are up firmly in positive territory Monday morning, outperforming peers from the region, thanks to hectic buying in defense stocks on reports the Christian Democratic Union (CDU) and their prospective coalition partner/partners, are considering setting up two special funds for defense and infrastructure investments. Defense stocks in major markets in Europe have moved higher as European leaders have agreed to boost defense spending. The benchmark DAX, which surged to 22,830.73 earlier in the session, was up 280.49 points or 1.25% at 22,775.77 a little while ago. German defense stock Rheinmetall is soaring 12%, Thyssenkrupp is zooming 15%, Airbus is rising 3.3% and MTU Aero Engines is rising 2.3%. Daimler Truck Holdings is gaining about 2.3%. Siemens Energy, Commerzbank, SAP, Hannover Rueck, HeidelbergCement and Munich RE are up 1 to 2%. Fresenius, Bayer, Deutsche Telekom, Siemens, Deutsche Post, Volkswagen and Allianz are modestly higher. Vonovia is down by about 3.2%. Continental, Sartorius and E.ON. are down 1.6 to 1.8%. Symrise, Puma, Infineon, Porsche and Henkel are down 0.7 to 1%. Data from S&P Global showed, the HCOB Germany Manufacturing PMI was revised higher to 46.5 in February 2025 from a preliminary of 46.1, compared to 45 in January. The data continued to indicate a severe contraction in the manufacturing sector, althoush the drop was the mildest in nearly two years. Flash data from Eurostat showed Eurozone inflation eased slightly in February, with the harmoized index of consumer prices logging an annual growth of 2.4% in the month, after rising 2.5% in January. The rate was expected to ease to 2.3%. Likewise, core inflation that excludes energy, food, alcohol and tobacco, slowed marginally to 2.6% from 2.7% in the previous month. This was also slightly above forecast of 2.5%. On a monthly basis, the HICP gained 0.5% in February.