The merchandise trade surplus widened from August's smaller revised CHF3.81 billion to CHF6.32 billion in September, a multi-year high. The latest reading was well above the CHF4.38 billion posted in the same month in 2022 but mainly reflected a 9.0 percent yearly slump in imports. Exports were up just 0.4 percent, although this was their first positive print in three months.

Seasonally adjusted, the surplus stood at CHF5.03 billion, up from CHF3.13 billion last time. Exports climbed 8.9 percent on the month, building on August's 7.7 percent bounce, while imports edged 0.3 percent higher after a 4.3 percent gain. The real trade balance also improved as export volumes increased 3.6 percent and their import counterpart fell 1.0 percent.

The September update puts real exports up 0.8 percent in the third quarter versus the previous period and imports down 0.6 percent. This follows contractions in both sides of the balance sheet in the second quarter and means that merchandise trade will have added slightly to GDP growth in the third 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.