DE: Merchandise Trade

Fri Jan 09 01:00:00 CST 2015

Consensus Actual Previous
Level E20.4B E17.7B E20.6B
Imports-M/M 1.5% -3.1%
Imports-Y/Y 1.7% 0.9%
Exports-M/M -2.1% -0.5%
Exports-Y/Y 1.4% 4.9%

The seasonally adjusted merchandise trade balance returned a smaller than expected but still sizeable E17.7 billion surplus in November after a slightly larger revised E20.8 billion excess in October. Unadjusted the black ink stood at E17.9 billion, down from E22.1 billion last time.

The adjusted November excess was the smallest in three months and reflected a 2.1 percent monthly drop in exports, their third decline since July, and a 1.5 percent rise in imports, only their second increase in five months. Compared with November 2013, unadjusted exports were up 1.4 percent (to other EMU countries 2.2 percent) while imports were 1.7 percent firmer.

The first two months of the fourth quarter yield an average monthly surplus of E19.2 billion, little different from the E19.4 billion mean posted in the third quarter when net exports added 0.2 percentage points to real GDP growth. A smaller contribution from the trade balance is probable in October-December but with signs that household spending is on the rise, this should not have prevented a moderately respectable increase in total output over the period.

Merchandise trade balance measures the difference between imports and exports of both tangible goods and services. In Germany the goods balance is the main focus as this dominates developments in the overall current account balance. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets.

Imports indicate demand for foreign goods and services in Germany. Exports show the demand for German goods in countries overseas. Given the size of the German economy, the euro can be sensitive to changes in the trade balance. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.