Breaking news
Highlights
- German trade surplus widened from €20.7 billion to €22.2 billion in December.
- Exports slid by 4.6%, with imports sliding by 6.7%.
- Up next, euro area Products and companies PMIs and Eurozone producer costs.
German Trade Surplus Widens on Imports Scurry
Economic indicators from Germany continued to send recessionary signals. In December, the German trade surplus widened from €20.7 billion to €22.2 billion. Economists forecast a trade surplus of €18.8 billion.
The latest figures highlighted the weak demand environment plaguing the German economy. Alternatively, the devil was in the details.
According to Destatis,
- Exports declined by 4.6% month-on-month in December.
- Imports slid by 6.7% month-on-month in December.
- Compared with 2022, exports have been down 1.4% in 2023, while imports slumped by 9.7%.
- Exports to EU nations fell by 5.5% month-on-month, with imports down 7.4%.
Trade with non-EU nations:
- Exports of goods to non-EU nations declined by 3.5%, with imports falling by 5.9%. Exports of goods to the US fell by 5.5%, with exports to China down 7.9%.
- Imports of goods from China tumbled by 8.5%, while imports from the US increased by 1.9%.
The latest numbers from Germany give the ECB extra reason to consider an April ECB rate decrease. A weakening German macroeconomic environment may perhaps impact the broader euro area economy.
EUR/USD Reaction to German Trade Data
Sooner than the trade data, the EUR/USD rose to a excessive of $1.07865 sooner than falling to a low of $1.07672.
Alternatively, in response to the trade data, the EUR/USD rose to a excessive of $1.07786 sooner than falling to a low of $1.07747.
On Monday, the EUR/USD was down 0.10% to $1.07760.
Next Up: Euro Area and US Products and companies PMIs
The Products and companies PMI from Italy and finalized Products and companies PMIs for France, Germany, and the Eurozone will garner investor interest. Upward revisions to preliminary numbers for the Eurozone may perhaps ease fears of a euro area recession. According to the preliminary look, the Eurozone HCOB Products and companies PMI declined from forty eight.8 to forty eight.4 in January.
Alternatively, investors need to also consider producer label figures for the Eurozone. A larger-than-anticipated fall in producer costs may perhaps raise investor bets on an April ECB rate decrease.
Economists consider producer costs a leading indicator of consumer label inflation. Producers minimize costs in a weaker demand environment to steady original business. Downward inclinations in producer costs dampen demand-pushed inflationary pressures.
Economists forecast producer costs to decline by 0.8% month-on-month in December. Producer costs fell by 0.3% month-on-month in November.
Later in the session, the US economic calendar wants consideration. The ISM Non-Manufacturing PMI and Fed commentary may perhaps influence investor bets on a March Fed rate decrease. Economists forecast the all-important ISM Non-Manufacturing PMI to increase from 50.6 to 52.0 in January.
FOMC member Raphael Bostic will also be in heart of attention.
