DE: Merchandise Trade

Thu Apr 09 01:00:00 CDT 2015

Consensus Actual Previous Revised
Level E19.0B E19.7B E19.7B E19.6B
Imports-M/M 1.8% -0.3%
Imports-Y/Y 0.8% -2.3%
Exports-M/M 1.5% -2.1%
Exports-Y/Y 3.9% -0.6%

The seasonally adjusted trade surplus in February was unchanged at January's marginally smaller revised E19.6 billion. Unadjusted the black ink stood at E19.2 billion, up from E15.9 billion at the start of the year.

The flat seasonally adjusted headline was the result of a 1.5 percent monthly rise in exports that was offset by a 1.8 percent increase in imports. Exports have been particularly volatile in recent months and while February's gain failed to offset a 2.1 percent drop in January, this followed a 2.8 percent spurt in December. Still, at E97.7 billion overseas purchases still saw their second highest level on record and unadjusted annual growth rose to 3.9 percent. Meantime, the monthly increase in imports was the first since November and only the second since September. Lower oil costs will have been a factor here and reflecting this, imports were up just 0.8 percent compared with a year ago.

Euro weakness seems to providing exports with something of a boost which bodes well for first quarter real GDP growth. Even so, an average E19.6 billion surplus in January/February was still 2.6 percent below the fourth quarter mean so a major lift from net foreign trade over the period looks unlikely.

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.