DE: Merchandise Trade

Tue May 08 01:00:00 CDT 2018

Actual Previous Revised
Level E22.0B E19.2B E19.4B
Imports-M/M -0.9% -1.3%
Imports-Y/Y -2.3% 4.7%
Exports-M/M 1.7% -3.2%
Exports-Y/Y -1.8% 2.4%

The seasonally adjusted trade balance was in a E22.0 billion surplus in March following a marginally larger revised E19.4 billion in February. Unadjusted, the surplus was E25.2 billion, essentially unchanged from E25.1 billion a year ago.

The monthly increase in the black ink, which saw its highest level since November, was attributable to a combination of stronger exports and weaker imports. The former rose 1.7 percent versus February, the first increase in four months. By contrast, imports were off 0.9 percent, their third consecutive decline and further evidence of some loss of domestic economic momentum since the turn of the year. Annual export growth now stands at minus 1.8 percent while imports are 2.3 percent lower on the year.

The March report makes for a first quarter trade surplus of E63.1 billion, just slightly smaller than the E64.3 billion posted in the same period a year ago. However, its is also probably indicative of a much smaller total net export contribution to real GDP growth than the 0.5 percentage points seen at the end 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.