The merchandise trade surplus widened in March from February's downwardly revised CHF3.14 billion to CHF4.53 billion and, more importantly, from the CH2.82 billion posted in the same month in 2022. The annual improvement reflected a 7.0 percent yearly rise in exports and just a 0.2 percent increase in imports.

Seasonally adjusted, the surplus stood at CHF3.07 billion after CHF2.38 billion in mid-quarter. The advance here was due to a 1.8 percent monthly gain in exports and a 1.4 percent fall in imports. This left the first quarter surplus at CHF8.28 billion, up from CHF6.39 billion at the end of 2022 and little changed from CHF8.32 billion seen in the first quarter of last year.

The real trade position also improved in March as export volumes increased 2.6 percent and their import counterpart only held steady. This means that real merchandise trade will have provided a useful boost to real GDP growth last quarter.

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.