Germany's trade dynamics showed mixed trends in September 2024. Exports slipped by 1.7 percent compared to August, totalling €128.2 billion, while imports climbed by 2.1 percent to €111.3 billion. This narrowed the trade surplus to a smaller than expected €17.0 billion, a notable drop from €21.4 billion the previous month. Year-over-year, exports dipped slightly by 0.2 percent, while imports rose 1.4 percent.

Trade with EU partners reflected these shifts, with exports down 1.8 percent and imports up 1.6 percent. The Eurozone saw a sharper 2.4 percent decline in German exports. Meanwhile, trade with non-EU nations presented a similar pattern: exports fell by 1.6 percent, but imports surged by 2.6 percent. The US remained a bright spot, with German exports growing by 4.8 percent to €14.2 billion, underscoring strong transatlantic demand. However, exports to China and the UK contracted significantly, falling by 3.7 percent and 4.9 percent, respectively. On the import side, China solidified its position as Germany's top supplier, with imports up 5.6 percent to €14.1 billion.

Despite some challenges, Germany's trade figures underline its resilience amid shifting global demand and geopolitical complexities. However, the narrowing surplus signals potential headwinds in maintaining a favourable trade balance. This latest update puts the German RPI at 21 and RPI-P at 13, showing overall economic activity still exceeding market expectations.

The consensus forecast looks for the trade surplus to decline to E19.0 billion in September from E22.5 billion in August.

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 and can offer a guide to an economy's competitiveness.

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 currency values in foreign exchange markets.

Imports indicate demand for foreign goods and services in Germany. Exports show the demand for German goods in countries overseas. Given the size of the German economy, the euro can be sensitive to changes in the trade balance. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of 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.