The merchandise trade balance was in a CHF6.18 billion surplus in June, up from a minimally smaller revised CHF5.79 billion in May and CHF4.78 billion a year ago. However, the increase in the black ink only reflected a 2.4 percent yearly fall in exports that was swamped by a 9.9 percent slump in imports.

Seasonally adjusted, the surplus stood at CHF4.90 billion, up from May's larger revised CHF4.22 billion and a 9-month high. Exports increased 1.2 percent on the month, their fourth gain in the last five months, while imports fell 2.2 percent following a 3.6 percent decline previously. Even so, the real trade balance deteriorated as export volumes dipped 0.3 percent and imports grew 1.0 percent. That said, net export volumes still made a positive contribution to real GDP growth last quarter.

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.