DE: Merchandise Trade

Fri Mar 09 01:00:00 CST 2018

Actual Previous Revised
Level E21.3B E21.4B E21.3B
Imports-M/M -0.6% 1.4% 1.1%
Imports-Y/Y 6.7% 5.0% 4.7%
Exports-M/M -0.4% 0.3% 0.0%
Exports-Y/Y 8.6% 3.9% 3.6%

The seasonally adjusted trade balance was in a E21.3 billion surplus at the start of the year, matching its minimally smaller revised outturn in December. Unadjusted, the black ink stood at E17.4 billion, a E2.8 billion increase versus the outcome a year ago.

Stability in the headline reflected a 0.4 percent monthly fall in exports offset by a 0.6 percent drop in imports. Unadjusted annual growth of the former was 8.6 percent, up from 3.6 percent in December and the highest mark since last May. At the same time, the import rate climbed from 4.7 percent to 6.7 percent.

The January black ink was little changed from its average level in the fourth quarter when total net exports boosted quarterly GDP growth (0.6 percent) by fully 0.5 percentage points. The likelihood is that the external contribution will be rather less in the current quarter.

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.