The seasonally adjusted merchandise trade balance showed a €9.2 billion surplus in September, down from a smaller revised €11.1 billion in August. However, this was still its second best reading so far in 2023. Unadjusted, the balance showed a €10.0 billion excess, a marked improvement on the €36.6 billion deficit posted a year ago.

The monthly decline in the headline surplus reflected both weaker exports, which fell 0.5 percent, and stronger imports, which rose 0.3 percent. Annual unadjusted growth of the former now stands at minus 9.3 percent and of the latter at minus 23.9 percent. Both sides of the balance sheet continue to be impacted by Russian embargoes and, for much of the year, imports have been depressed by weaker oil prices. To this end, overall EU exports to Russia over the first nine months of 2023 slumped 29.8 percent versus the same period in 2022 while imports from Russia nosedived fully 76.1 percent.

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. For the Eurozone, monthly data are available for trade in goods; statistics on services are released as part of the overall quarterly current account report. The headline trade data are not adjusted for seasonal factors and so should only be viewed in relation to the outturn a year ago. However, seasonally adjusted figures available elsewhere in the report do allow for monthly comparisons.

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 local currency dollar in the foreign exchange market.

Imports indicate demand for foreign goods and services. Exports show the demand for Eurozone goods in countries overseas. The euro can be particularly sensitive to changes in the balance since a trade deficit/surplus can create greater/reduced demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of EMU 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.