Rolling coverage of the latest economic and financial news, as euro rallies and DAX jumps in early trading

• German election live: Merz says priority is to make Europe independent from US on defence as coalition talks to begin

Shares in some European weapons makers are rising in early trading too.

German tank maker Rheinmetall jumped 3% at the start of trading, while in London BAE Systems are up 1.7%.

‘’A dose of more certainty has been injected into European politics, with the Germany’s Conservatives winning the elections. It comes at a crucial time for the continent. Three years on from the invasion of Ukraine, high stakes deal making between the US and Russia continues, Ukraine is out in the cold and the outcome will have huge implications for security in Europe.

There is a dawning realisation that European nations will have to pull together and present a more united deterrent force, and Friedrich Merz, the CDU leader, is reading from that script. He has pledged to relax fiscal rules, to increase defence spending and inject the economy with much needed investment. But while Merz seems determined to ease off the so-called debt brake, which limits annual borrowing to 0.35% of GDP, it won’t be straightforward, because he will need a two-third majority in parliament.