FR: Merchandise Trade

Fri Jan 09 01:45:00 CST 2015

Consensus Actual Previous Revised
Level E-4.4B E-3.2B E-4.6B E-4.3B

The seasonally adjusted merchandise trade balance was in the red to the tune of E3.2 billion in November following a smaller revised E4.3 billion shortfall in October.

Exports rose 0.6 percent on the month, their fourth consecutive gain, in large part on the back of a stronger aviation sector. However, pharmaceuticals, industrial machinery and metals all fell. Compared with November 2013, exports were up 4.4 percent. Meantime, imports declined a monthly 1.9 percent having already shown no growth in October and were 2.4 percent weaker on the year.

At E3.8 billion, the average deficit over the first two months of last quarter was about E1 billion less than its third quarter mean and should be reflected in a much needed positive contribution from total net exports to real GDP growth. The French government for one will certainly not be unhappy with the ongoing slide in the euro.

Merchandise trade balance measures the difference between imports and exports of both tangible goods and services. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade. In France the main focus is the balance on trade in goods.

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. Given the size of the French 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.