DE: Merchandise Trade

Mon Jun 08 01:00:00 CDT 2015

Consensus Actual Previous Revised
Level E19.4B E22.3B E19.3B E19.4B
Imports-M/M -1,3% 2.4%
Imports-Y/Y 2.8% 7.1%
Exports-M/M 1.9% 1.2%
Exports-Y/Y 7.5% 12.4%

The seasonally adjusted trade balance was in a larger than expected E22.3 billion surplus in April following a marginally upwardly revised E19.4 billion excess in March. The unadjusted black ink stood at E22.1 billion, down only slightly from a revised E23.1 billion last time.

The improvement in the adjusted headline reflected a 1.9 percent monthly increase in exports to a new record high of E100.4 billion and a 1.3 percent contraction in imports, their first decline since January. Exports have now expanded for three consecutive months Compared with April 2014 exports were up 7.5 percent, within which sales to other EMU states rose just 3.3 percent, and imports 2.8 percent.

The April data suggest that German exporters are making the most of a weak exchange rate. Net exports subtracted 0.2 percentage points from the quarterly change in total output in January-March but the early indications are that they will provide a boost to economic growth this quarter.

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.