The merchandise trade surplus narrowed from September's marginally smaller revised CHF6.28 billion to CHF4.60 billion in October. However, this was only a 2-month low and well above the CHF4.19 billion posted in the same month in 2022. That said, the improvement only reflected a 4.1 percent fall in imports that more than offset a 1.7 percent drop in exports.

Seasonally adjusted, the surplus stood at CHF3.40 billion, down from CHF5.02 billion in September. Exports slumped a monthly 10.7 percent, more than unwinding September's 9.4 percent spike and hitting a 3-month low. The slide was mainly due to an 18.7 percent nosedive in chemicals and pharmaceuticals after an 18.6 percent jump last time. Imports were down 5.0 percent after a 0.6 percent gain. The real trade balance also narrowed as export volumes declined 7.2 percent and their import counterpart fell only 3.1 percent.

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.