FR: Merchandise Trade

Fri Aug 07 01:45:00 CDT 2015

Consensus Actual Previous
Level E-3.7B E-2.658B E-4.0B

The seasonally adjusted red ink on merchandise trade narrowed from an upwardly revised E3.9 billion in May to E2.7 billion in June. The latest deterioration reflected a combination of stronger exports and weaker imports. The former increased 3.9 percent on the month. Imports expanded a monthly 0.4 percent. France ran a deficit with other Eurozone countries with the exception of Spain and Belgium.

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.