German Exports Rise But Trade Balance Falters

The German economy continues to show green shoots of recovery following increases in both import and export levels over August. Figures released by Statistiches Bundesamt Deutschland have shown imports grew by an impressive 5.8% and were largely driven by an increase in demand for steel within the construction sector, whilst exports spiked 2.4% due to an increase in demand for private vehicles.

The numbers outperformed market expectations but are still nearly 10% down on pre-coronavirus levels. The figures also reflect some level of recovery within Germany’s major trading partners – China, the UK and the US.

The country’s trade balance unexpectedly fell over the same time period, falling from €18B to €15.7B as more areas of the global economy struggle to fully re-open following recent restrictions.

The euro moved lower against both the pound and the dollar after the announcements and continues to trade below 1.18 and €1.10 respectively. The readings topped of a relatively positive week for German economic data following an expansive service sector PMI and an increase in factory orders.

Attentions now turn to Europe’s preliminary GDP readings for Q3 2020 that are released later this month. These will offer the first insight into how effective emergency Covid-19 recovery funds have been and also drive short-term risk appetite.