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Trade Surplus Edges Lower With Export Momentum Waning


Germany's trade surplus was slightly larger than expected in September at E16.5bln versus E16.3bln consensus, but declined against last month's upwardly revised figure of E17.7bln (was E16.6bln). Both exports and imports declined, by -2.4% M/M and -1.7% M/M respectively.

  • The decline in the trade surplus came from a faster drop in exports (-2.4% M/M) than imports (-1.7%), amid weaker foreign demand.
  • Weakness was broad-based geographically: exports and imports declined to both EU and non-EU countries vs September, with non-EU exports weakening sharply (-2.8% M/M).
  • In real terms, the trade balance was almost unchanged versus last month, and was fairly steady on the quarter, suggesting limited impact in either direction on Q3 GDP (which printed -0.1% in the flash estimate).
  • The trade data continue to suggest soft international demand for German goods, and recent German PMI and ifo surveys point to continued weakness in export prospects.
  • German factory orders data for September will be released on Monday, with September industrial production out on Tuesday. Both are expected to show M/M declines, suggesting little momentum at the beginning of Q4.

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