The difference between exports and imports of Euro-zone goods and services. The Trade Balance is one of the biggest components of Europe ‘s Balance of Payment, and thus gives valuable insight into pressures on the value of the Euro.
A negative Trade Balance figure (deficit) indicates that imports are greater than imports. When exports are greater than imports, the Euro-zone experiences a trade surplus. Trade surpluses indicate that funds are coming into Europe in exchange for exported goods and services. Because such exported goods are usually purchased with Euros, trade surpluses typically indicates that currency is flowing into the Euro-zone. Such currency inflows may lead to a natural appreciation of a Euro, unless countered by similar capital outflows. At a bare minimum, surpluses will buoy the value of the currency.
There are a number of factors that work to diminish the market impact of Euro-zone Balance of Trade. The report is not very timely, released fifty days after the reporting period. In addition, developments in many of the Trade Balance’s components are typically well anticipated. Lastly, since the report reflects data for a specific reporting month, any significant changes in the Trade Balance should plausibly have been already felt during that month and not during the release of data. Despite these considerations, and because of the overall significance of Trade Balance data, the release has historically been one of the more important reports out of Europe .
The headline figure for trade balance is expressed in millions of Euros, and usually accompanied by the year-on-year percentage change.
Relevance: Tends to move markets on release
Release schedule : 9:00 GMT; monthly, about 50 days after reporting month
Source of report : Eurostat
Web Address : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Refer > Euro-indicators – External trade > Trade Balance and indices > Balance of Trade – Trade value
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