CH: Merchandise Trade Balance

Tue Mar 20 02:00:00 CDT 2018

Actual Previous Revised
Trade Balance level CHf3.14B CHf1.32B CHf2.08B

The unadjusted trade balance was in a CHF3.14 billion surplus in February, up from a larger revised CHF2.08 billion in January. Seasonally adjusted, the black ink stood at CHF3.2 billion, following a CHF1.1 billion outturn last time.

Within the adjusted data, exports were 1.8 percent firmer on the month while imports fell 9.8 percent, more than offsetting January's 8.9 percent surge to a new record high. In volume terms, the gap was even wider as exports climbed 2.3 percent and imports slumped 9.5 percent.

The February report leaves intact a fairly solid uptrend in exports but the recent jump in volatility levels leaves the trend in imports much less certain. The March data should help to establish a clearer picture.

The merchandise trade balance measures the difference between the total value of Swiss merchandise exports and imports. The focus is on the balance of trade in goods, excluding precious metals, gemstones, works of art and antiques. This is provided in unadjusted and workday adjusted measures for cash and volume. Seasonally adjusted monthly changes are also available for total exports and imports.

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 the value of the Swiss franc in the foreign exchange market. Switzerland's major trading partners include Germany, France, Italy and the United States. While Switzerland still exports large amounts of traditional products such as chocolate and watches, more than half of Swiss exports are in mechanical and electrical engineering and chemicals today. A positive trade balance indicates a trade surplus while a negative balance represents a trade deficit. Trade surpluses indicate that foreigners are buying more Swiss goods, which are typically paid for in Swiss Francs. This translates into greater demand for the currency and upward pressure on the value of the Franc. However, if the balance is a deficit, Swiss consumers are buying goods from trading partners which translates into higher demand for foreign currencies placing downward pressure on the value of the Franc.