EMU: Merchandise Trade

Mon Aug 17 04:00:00 CDT 2015

Actual Previous Revised
Level E21.9B E21.2B E21.3B
Imports-M/M 1.2% 0.0%
Imports-Y/Y 7.0% 0.0%
Exports-M/M 1.4% -1.5%
Exports-Y/Y 12.0% 3.0%

The seasonally adjusted trade balance was E21.9 billion, up from a revised E21.3 billion in May. Exports of goods to the rest of the world were €182.7 billion, an increase of 12 percent from a year ago. Imports from the rest of the world were E156.4 billion, 7 percent higher from a year ago. Intra-euro area trade rose to E151.2 billion in June 2015, up 10 percent compared with June 2014.

For the six months to June 2015, euro area exports of goods to the rest of the world rose 6 percent compared with January to June 2014), while imports were up 3 percent compared with the year earlier period.

Apart from the weakness of the oil market, the current soft level of the euro should help to ensure continued strong trade data over the rest of 2015.

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. For the Eurozone, monthly data are available for trade in goods; service statistics are released as part of the overall quarterly current account report. The headline trade data are not adjusted for seasonal factors and so should be viewed in relation to the year ago month. Seasonally adjusted figures are also available for monthly comparisons.

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 the value of the local currency dollar in the foreign exchange market.

Imports indicate demand for foreign goods and services. Exports show the demand for Eurozone goods in countries overseas. The euro can be particularly sensitive to changes in the balance since a trade deficit/surplus can create greater/reduced demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of EMU 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.