| Actual | Previous | Revised | |
| Balance | CHF4.32B | CHF4.073B | CHF3.99B |
Highlights
The trade surplus improved to 4.319 billion Swiss Francs in October from 3.99 billion in September as export growth outpaced that of imports.
After a 27.1 percent increase in September, export growth was more measured, expanding 6.2 percent in October from the previous month. Compared to a year ago, they were 9.1 percent lower. Imports expanded 5.8 percent in October over September to 21.032 billion Francs and are up 6 percent year-on-year.
Helping to boost trade was a pickup in watch exports, up 3.4 percent in real terms, after two consecutive months of decline as US tariffs hit the sector. Pharmaceuticals and chemicals saw exports increase 0.2 percent in October, but fell 2.9 percent on the import side of the ledger.
Exports to the US fell 5.5 percent in October, a stark contrast to the 42.1 percent increase in September. At the same time, imports ticked up 0.6 percent in October after a 6.5 percent gain the month before. Trade with Germany was brisk with exports up 12.8 percent, while imports rose 9.5 percent.
Today's report comes after the US and Swiss governments announced a trade deal last week. Today's data doesn't reflect that outcome and it could take some months to see if there are any effects. The 15 percent levy now imposed on Switzerland brings it in line the rate that is being applied to the European Union.
The trade agreement could also have a positive effect on business sentiment, particularly for the watch industry.
Definition
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.
Description
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.