DE: Merchandise Trade

Thu Feb 08 01:00:00 CST 2018

Actual Previous Revised
Level E21.4B E22.3B
Imports-M/M 1.4% 2.3% 2.2%
Imports-Y/Y 5.0% 8.3% 8.2%
Exports-M/M 0.3% 4.2% 4.1%
Exports-Y/Y 3.9% 8.2% 8.1%

The seasonally adjusted merchandise trade balance returned a E21.4 billion surplus in December. This was E1.9 billion below an unrevised E22.3 billion in November and put the calendar year black ink at E244.9 billion. This was just E4.0 billion short of the record 2016 outturn. The unadjusted year-end surplus was E18.2 billion, a 0.5 percent decrease from December 2016.

Seasonally adjusted, December exports rose 0.3 percent on the month after a 4.1 percent increase in November. Imports were 1.4 percent higher than in mid-quarter and 5.0 percent above their level a year ago. Over the year as a whole, total exports were up 6.3 percent with sales to the rest of the Eurozone gaining 7.0 percent. Imports advanced a slightly stronger 8.3 percent with purchases from other Eurozone countries rising 7.2 percent.

The December trade report underlines the high levels of competitiveness in German industry. Although imports were also robust, the rest of the Eurozone will still want to see the new German government doing more to stimulate domestic demand in order to reduce the black ink.

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.