The seasonally adjusted merchandise trade balance began the year in a healthy surplus. At €28.1 billion, January's black ink was nearly double December's upwardly revised €14.3 billion and well above anything seen in 2023. However, while the improvement in part reflected a 2.1 percent monthly rise in exports, the bulk of the work was done by imports which declined 4.0 percent. Unadjusted, the balance was in an €11.4 billion surplus, a marked improvement on a €32.6 billion deficit in January last year.

Today's report leaves a broadly flat trend for exports and a declining path for imports. The former now shows positive unadjusted yearly growth (1.3 percent) for the first time since last June but the import rate (minus 16.1 percent) remains deep in negative territory. Both sides of the balance sheet continue to be impacted by the war in Ukraine. Hence, for the EU as a whole, exports to Russia were down 27.2 percent on the year while imports were off fully 61.3 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.