11.09 Germany's central bank has warned the country's economy, Europe's largest, may have shrunk sharply in the fourth quarter, dragged down by a weak industrial sector. Its statement follows its downward revision of the economic forecast on December 7. The Bundesbank said in its monthly report published today: Indicators point to a perceptible decline in economic activity at the end of the year. The current weakness emanates mainly from the industrial sector, in which production has been curbed significantly. But the central bank's message was not all doom and gloom: On the positive side, export expectations are now positive again. In connection with an increase in business confidence this may point to the fact that the period of economic weakness in Germany can be overcome soon. 10.26 Eurozone exports in October surged 14pc year on year, driving a €10.2bn trade surplus compared with a €0.7bn deficit in October 2011. The shift is partly due to crisis-ridden Greece, Spain and Portugal cutting their trade deficits by wide margins between January to September, with Italy swinging into surplus. The Mediterranean nations are also seeing only modest wage rises, which is helping the region regain competitiveness. 09.41 Italian statisticians have played down the good news that exports have had their strongest year-on-year rise since August last year, leading to an October trade surplus of €2.5bn, compared with a deficit of €1.11bn in October 2011. Sales of Italian goods to the rest of the world in October rose 12pc year-on-year, but the country's national institute of statistics said this was largely due to there being two more trading days in October this year than in October 2011. 09.13 European markets have had a mixed opening this morning. The FTSE fell 0.22pc, the CAC dropped 0.29pc, the DAX rose 0.23pc, the IBEX in Madrid edged up 0.07pc and the MIB in Milan gained 0.29pc. 09.08 European markets have opened and the German DAX has hit a near five-year high, hitting 7627 points in early trading.