Seasonally adjusted the merchandise trade balance was in a surprisingly large €18.4 billion surplus in April, up from March's smaller revised €14.9 billion and its best performance since January 2021. Unadjusted, the black ink stood at €15.2 billion versus just €2.4 billion a year ago.

The headline improvement partly reflected a 1.2 percent monthly rise in exports, their third increase in the last four months, with sales to the U.S. up 4.7 percent and to China up 10.1 percent. At the same time, imports dropped 1.7 percent, their second straight decline. Exports are still nearly 5 percent below their February peak while imports are more than 16 percent short of the all-time high they saw in August last year. Unadjusted annual export growth now stands at minus 1.8 percent while imports are down 12.4 percent on the year. Exports to Russia declined an adjusted monthly 17.8 percent while imports from Russia were down 7.6 percent versus March and fully 91.5 percent unadjusted on the year.

Today's update puts the German ECDI at minus 8 and the ECDI-P at 7, both measures showing overall economic activity moving much as expected.

Germany's goods balance is expected to narrow slightly to a €16.0 billion surplus in April versus a €16.7 billion surplus in March that benefited not from exports, which fell sharply, but from imports which fell even more sharply.

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.