DE: Merchandise Trade

January 9, 2017 01:00 CST

Consensus Actual Previous Revised
Level E21.0B E21.7B E20.5B E20.6B
Imports-M/M 3.5% 1.4% 1.3%
Imports-Y/Y 4.5% -2.2% -2.3%
Exports-M/M 3.9% 0.5%
Exports-Y/Y 5.6% -4.1% -4.0%

The seasonally adjusted trade balance was in a E21.7 billion surplus in November, up from a marginally larger revised E20.6 billion in October. Unadjusted, the black ink stood at E22.6 billion compared with E20.5 billion in a year ago.

The improvement in the headline print reflected a 3.9 percent monthly bounce in exports to a new record high of E104.5 billion. This followed a 0.5 percent gain in October. Imports were 3.5 percent higher after a 1.2 percent increase last time. Annual growth of exports jumped to 5.6 percent from minus 4.0 percent while imports were up 4.5 percent having previously declined 2.3 percent.

Today's report puts the average trade surplus in October/November 2.3 percent above its mean level in the third quarter when total net exports subtracted 0.3 percentage points from real GDP growth. Euro weakness versus the dollar should help to secure continued large surpluses over the first half of 2017.

The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness.

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.