The seasonally adjusted merchandise trade balance improved from a downwardly revised €8.7 billion in September to €10.9 billion in October. This was the second largest surplus so far in 2023. The increase in the black ink reflected stronger exports, which rose 0.7 percent on the month, and weaker imports, which declined 0.3 percent. Unadjusted, the balance was in an €11.1 billion surplus versus a €28.7 billion deficit a year ago.

The October data leave a modestly improving trend in a seasonally adjusted balance, although both exports and imports remain below their respective levels in October 2022. Hence unadjusted annual growth of exports stands at minus 2.4 percent and of imports, at minus 16.3 percent. Both sides of the balance sheet continued to be negatively impacted by trade with Russia. Over the first 10 months of the year exports to Russia are down nearly 30 percent and imports fully 76 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.