The merchandise trade balance was in a CHF3.54 billion surplus in March, down from a marginally larger revised CHF3.68 billion in February and CHF4.56 billion a year ago. The decrease in the black ink reflected a 16.6 percent yearly drop in imports that was more than offset by a 17.6 percent slide in exports. The import rate has been sub-zero every month since last February.

Seasonally adjusted, the surplus stood at CHF2.85 billion, up from February's minimally larger revised CHF2.34 billion and a 5-month high. Even so, exports fell 0.6 percent on the month leaving the improvement wholly attributable to a 3.3 percent drop in imports. Still, the March data make for a modest increase in the real trade balance last quarter as export volumes rose 0.6 percent and their import counterpart decreased 0.2 percent. As such, net foreign merchandise trade will have provided a small boost to real GDP growth.

The merchandise trade balance measures the difference between the total value of Swiss merchandise exports and imports. The focus is on the balance of trade in goods, excluding precious metals, gemstones, works of art and antiques. This is provided in unadjusted and seasonally adjusted measures for cash and volume.

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 Swiss franc in the foreign exchange market. Switzerland's major trading partners include Germany, France, Italy and the United States. While Switzerland still exports large amounts of traditional products such as chocolate and watches, more than half of Swiss exports are in mechanical and electrical engineering and chemicals today. A positive trade balance indicates a trade surplus while a negative balance represents a trade deficit. Trade surpluses indicate that foreigners are buying more Swiss goods, which are typically paid for in Swiss Francs. This translates into greater demand for the currency and upward pressure on the value of the Franc. However, if the balance is a deficit, Swiss consumers are buying goods from trading partners which translates into higher demand for foreign currencies placing downward pressure on the value of the Franc.