The seasonally adjusted merchandise trade balance improved from an upwardly revised €11.1 billion in October to €14.8 billion in November, easily its strongest print so far in 2023. The improvement reflected a combination of stronger exports, which rose 1.0 percent on the month to their highest level since May, and weaker imports, which declined 0.6 percent and have not risen since July. Unadjusted, the balance was in a €20.3 billion surplus versus a €13.8 billion deficit a year ago.

The November data leave a broadly flat trend for exports and a declining path for imports. However, both exports and imports remain below their respective levels in November 2022. Hence unadjusted annual growth of exports now stands at minus 4.7 percent and of imports, at minus 16.7 percent. Both sides of the balance sheet continue to be negatively impacted by trade with Russia. Over the first 11 months of the year exports to Russia were down 30.3 percent and imports fully 75.6 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.