In September, the euro area recorded a robust trade surplus as seasonally adjusted exports rose by 0.4 percent and imports dropped by 0.8 percent month-over-month. This saw the surplus widen to €13.6 billion from a downwardly revised €10.8 billion in August. Similarly, the EU reported a rise in its surplus, from €8.1 billion to €11.0 billion, driven by a sharper decline in imports than exports.

Year-over-year data show a limited improvement in the region's trade dynamics with exports increasing by 0.6 percent and imports decreasing by 0.6 percent. Cumulatively, from January to September 2024, the euro area achieved a surplus of €140.8 billion, a marked increase on the €13.9 billion posted in the same period of 2023 but mainly due to a 5.6 percent drop in imports.

The EU mirrored these trends, with extra-EU exports up by 0.8 percent and imports slightly lower. Product-wise, machinery and vehicles led the surplus gains, while reduced energy deficits underscored diversification efforts. This latest update leaves the RPI at 13 and the RPI-P at 1, showing economic activity in general marginally exceeding expectations.

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.