FR: Merchandise Trade

Fri Jun 05 01:45:00 CDT 2015

Actual Previous Revised
Level E-3.0B E-4.6B E-4.4B

The seasonally adjusted trade balance was in the red to the tune of E3.0 billion in April following a slightly smaller revised E4.4 billion deficit in March. This was the smallest shortfall since July 2009.

The headline improvement was driven by a broad-based 2.1 percent monthly decline in imports although a 1.4 percent increase in exports, as stronger aeronautical sales offset weaker motor vehicles and refined petroleum products, also helped to narrow the gap. Compared with a year ago exports were up 6.5 percent and imports 2.6 percent.

Although the volatility of energy prices continues to have an important say in shaping the nominal trade balance April's deficit was more than 21 percent smaller than the first quarter average. Having subtracted some 0.5 percentage points from quarterly economic growth in January-March, the early indications are that net exports will provide a possibly sizeable boost this quarter.

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.