FR: Merchandise Trade

Thu Jun 07 01:45:00 CDT 2018

Actual Previous Revised
Level E-4.95B E-5.26B E-5.01B

The seasonally adjusted trade balance was E4.95 billion in the red in April, little changed from the downwardly revised E5.01 billion posted in March.

The minor improvement reflected a 3.0 percent monthly rise in exports that just more than offset a 2.5 percent increase in imports, although only the latter secured a new record high (E46.50 billion). The advance in the former was due to a rebound in sales of aerospace products and autos as well as stronger industrial equipment and agricultural products. Imports were supported by gains in transportation equipment, chemicals and refined petroleum.

The April outturn constitutes a fall in the red ink of just over 5 percent versus the first quarter average. However, the trade deficit has essentially been oscillating around the E5 billion mark for around a year now and shows little sign of any sustained breakout in either direction.

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. Given the size of the French 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.