DE: Merchandise Trade

Tue Jan 09 01:00:00 CST 2018

Actual Previous Revised
Level E22.3B E19.9B
Imports-M/M 2.3% 1.9%
Imports-Y/Y 8.3% 8.3% 8.4%
Exports-M/M 4.2% -0.5% -0.3%
Exports-Y/Y 8.2% 6.8% 6.9%

The seasonally adjusted trade balance was in a E22.3 billion surplus in November, a E2.4 billion increase versus October's unrevised outturn and its strongest reading since April 2016. Unadjusted the black ink stood at E23.7 billion, up E1.7 billion from a year ago.

The widening in the adjusted surplus reflected a 4.2 percent monthly increase in exports, their first rise since August, that easily more than eclipsed a 2.3 percent gain in imports. Annual unadjusted growth of the former now stands at 8.2 percent and of the latter at 8.3 percent.

The latest data put the average October/November surplus just 1.1 percent above its mean value in the third quarter when it rose 3 percent versus the previous period. Last quarter total net exports added a sizeable 0.4 percentage points to real GDP growth but any impact in the current period is likely to be much smaller. Even so, the persistently large surplus will ensure that other Eurozone member governments continue to push for a more expansive German fiscal policy.

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.