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Germany DAX rebound: DAX climbs as investors pin hopes on SOFT Brexit


In a recovery for the blue chip stock market index, the DAX clawed back gains after dropping earlier today from negative German economy data and escalating tensions between Italy and the EU.

The German stock market is currently trading at 11,533 points as of just after 15:00 GMT, an increase of 200 points from the 11,320 points seen at the open this morning.

Hopes of a Brexit breakthrough have bolstered the German stock index, as the eurozone keeps a firm focus on developments in London while Mrs May holds her Cabinet meeting to approve the draft EU divorce bill she has negotiated with Brussels.

The document is understood to have been agreed at a technical level by UK and EU officials, but exact details of what has been penned in the agreement have yet to be released.

It is believed both sides have devised a working solution for the Irish border issue, which has proved to be the main point of contention throughout the negotiating process.

But the negotiations could still be far from over, as reports suggest Mrs May may have signed up to the possibility of a permanent customs union with the EU, unless a better deal is reached by the end of the transition period in December 2020.

The DAX had plummeted earlier today as new data showed the German economy was has shrunk for the first time since 2015 as global trade tensions sparked a knock-on effect on exports.

Lower consumer spending and disruption to levels of car production are thought to be the blame for the dent in Europe’s largest economy.

Gross domestic product (GDP) stumbled by 0.2 percent between July and September, the Federal Statistics Office said on Wednesday, marking the first quarter-on-quarter fall for Germany since 2015.

The economy grew by 1.1 percent from July to September in the same period last year.

Another factor which had a negative influence on the DAX was growing tensions surrounding the Italian budget, which has rumbled EU chiefs and left the euro floundering.

Italy today stood defiant on its spending plans as it re-submitted its draft 2019 budget to the European Commission with the same growth and deficit assumptions as a previous version rejected for breaking European Union rules.

The only concession offered by Rome in the revised plan is to sell more state assets and to pay off debt faster.

The financial statement from Rome left EU chiefs furious after it included a deficit budget of 2.4 percent of GDP – three times the previous administration’s target.

The European Commission threw the draft straight back at Italy to be revised, as the bloc claimed the nation’s growth assumptions were too high.

Italy’s government of the far-right League and populist Five Star movement have remained adamant on the budget, claiming the spending plans were in the best interest of the Italian nation.

Luigi Di Maio of Five Star said: “We have the conviction that this is the budget needed for the country to get going again.”



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