The merchandise trade surplus widened significantly at the start of the year. At CH5.08 billion, the black ink was up from both December's downwardly revised CHF2.77 billion and, more importantly, from the CHF3.08 billion posted in the same month in 2022. The annual improvement reflected an 11.4 percent yearly increase in exports that easily more than offset a 2.5 percent rise in imports.

Seasonally adjusted, the surplus stood at CHF3.12 billion after CHF2.82 billion in December. The improvement here was due to a 2.2 percent monthly increase in exports that outpaced a 0.9 percent advance in imports. Chemical and pharmaceutical products (3.9 percent) were notably strong while regionally, sales to the U.S. (12.8 percent) climbed especially sharply. Moreover, with total export volumes up 2.5 percent and imports only 0.2 percent, real net exports also rose for a second successive month. Although early days, this leaves net merchandise trade on course to make a positive contribution to first quarter real GDP growth.

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 seasonally adjusted measures for cash and volume.

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.