FX.co ★ DAX Rallies on US-EU Trade Deal

On Monday, the DAX 40 index in Frankfurt saw an increase of nearly 1%, reaching 24,420. This brings it closer to its all-time high of 24,639, which was recorded earlier this month. The upward movement followed a significant trade agreement between the US and the EU, designed to alleviate transatlantic tensions. Under the terms of the deal, most EU exports to the US, including automobiles, semiconductors, and pharmaceuticals, will face a base tariff of 15%. However, tariffs on steel and aluminum will remain at 50% but will only apply beyond certain quotas, while aerospace components, certain chemicals, and raw materials will be exempt from duties. Additionally, the EU has agreed to purchase $750 billion worth of US energy and military equipment. Although the tariff reduction is welcomed, the 15% rate continues to present challenges for European exporters. In response to the news, automaker stocks experienced significant gains, with Porsche stocks rising 3.3%, followed by Mercedes-Benz at 2%, Volkswagen at 1.9%, and BMW at 1%.