Carsten Brzeski, chief economist at ING, points out that the trade figures has just added to dismal data coming out of the eurozone’s largest economy this week as German exports (seasonally and calendar adjusted) dropped by 0.1% month-on-month in June, from 1.1% MoM in May.
Key Quotes
“On the year, exports were down by a painful 8%. Imports increased by 0.5% MoM, from -0.5% MoM in May. As a result, the trade balance narrowed to €18.1 billion in June, from €18.7bn in May. Not adjusted for seasonal and calendar effects, the trade balance shrank to €16.8bn, from €20.6bn in May.”
“Looking ahead, the outlook for German exporters is clearly in the hands of the US and China. Not only regarding the ongoing conflict but also regarding a possible conflict between the US and the EU, with President Trump already joking about tariffs on cars, and future trends in the Chinese market for automotives. The recent devaluation of the Chinese currency is another channel through which the trade conflict can harm the German economy.”
“All in all, today’s trade data marks the end of a disappointing second quarter. The bean counting season has started and will end next Wednesday with the release of German 2Q GDP.”
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