The seasonally adjusted surplus widened to €17.8 billion in October, up from September's slightly larger revised €16.7 billion and beating the market consensus by €0.7 billion. This was the second-best performance so far in 2023. Unadjusted, the surplus was €18.1 billion versus €6.1 billion a year ago.

However, the headline improvement masked another deterioration in both sides of the balance sheet. Exports were down 0.2 percent on the month following a 2.5 percent slump last time while imports were off 1.2 percent after a 1.9 percent decline to hit their lowest level since November 2021. Sales to the rest of the Eurozone slid 1.9 percent while imports declined by an equivalent amount. Outside of the bloc, exports rose 1.9 percent and imports 0.8 percent. Unadjusted annual growth of total exports now stands at minus 5.0 percent and of imports at minus 14.4 percent.

Today's update lifts the German RPI to minus 20 and the RPI-P to minus 7 but both measures still show overall economic activity falling somewhat short of market expectations.

Germany's goods balance is expected to widen to a €17.1 billion surplus in October versus a surplus of €16.5 billion in September that was lower than expected and reflected a sharper decline in exports than the decline in imports.

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.