German Exports Rise More Than Expected in September

what happened

Data from Destatis, Germany's federal statistics office, showed exports rising 2% from August in September, reversing a 0.4% decline in the previous month, according to a report from RTTNews via dpa-AFX. Reuters, citing analysts it polled, had expected only a 0.5% increase. Reuters also noted that exports had fallen in both July and August before this rebound, which was the fastest rise since February.

Imports grew 4.2%, well ahead of the 0.6% rebound seen a month earlier. As a result, the trade surplus shrank to 15.6 billion euros from 17.9 billion euros in August. Demand from EU countries drove most of the gain, with exports to the bloc up 3.5% and imports from it up 4.9%. On a yearly basis, exports rose 7.6% and imports 8.7%, while shipments to the United States increased 10.3%.

why it matters

Two points matter for markets: European demand for German goods remains firm, but faster import growth reduces the contribution of foreign trade to GDP. Bethmann HAL chief economist Alexander Krueger said trade will likely support growth for now but is unlikely to drive it.

market impact

Euro: strong exports support the economy, but a smaller surplus gives a mixed signal for EUR/USD

• ↔EUR/USD mixed — strong exports support the euro, while rising imports and a smaller surplus hold it back

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