The euro area's seasonally adjusted trade surplus rose to €16.2 billion, up from a revised €15.1 billion in April, despite monthly declines in both exports (minus 0.5 percent) and imports (minus 1.0 percent). This growth in surplus reflects not only a contraction in imports but also a structural shift towards export sectors, showing renewed strength.

Compared to May 2024, the trade surplus expanded by €3.5 billion, bolstered by a narrowing energy deficit, from €25.5 billion to €21.4 billion, likely due to stabilising energy prices and diversified sourcing. Chemicals led the export revival, with their surplus jumping from €19.5 billion to €24.3 billion, suggesting rising global demand and competitive strength in this sector. Machinery and vehicles also saw a modest gain, reinforcing the bloc's industrial backbone.

Exports reached €242.6 billion, a 0.9 percent annual rise, while imports slipped 0.6 percent to €226.5 billion, emphasising improving trade efficiency. In essence, the eurozone is benefiting from lower energy import burdens and a steady industrial performance, reinforcing its external position amid global uncertainties.

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.