The seasonally adjusted trade deficit narrowed sharply in November. At €5.94 billion, the mid-quarter shortfall followed a slightly downwardly revised €8.46 billion in October and was the smallest since February 2021.

However, the marked improvement was largely due to imports which declined fully 4.8 percent on the month to their lowest level since November 2021. Exports were off a much smaller 0.6 percent but, having declined 4.0 percent over the last three months, the trend here is also down. Annual export growth now stands at minus 5.1 percent while its import counterpart, depressed by weaker energy prices, is minus 14.1 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 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. Given the size of the French 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.