German Trade Surplus Narrows to €21.4 billion as Exports Fall by 2.0% in February

On Monday, the German economy was in focus. German trade terms and industrial production numbers drew investor attention.

German Trade Surplus Narrows as Exports Decline

In February, the German trade surplus narrowed from €27.6 billion to €21.4 billion. Economists expected the trade surplus to narrow to €25.5 billion.

Notably, exports declined by 2.0% in February after surging 6.3% in January. Economists forecast exports to fall by 0.5%. Imports increased by 3.2% after a 3.6% rise in January.

According to Destatis,

• Exports to EU countries fell by 3.9%, with imports from EU countries sliding by 5.7%.
• German exports to euro area countries declined by 3.6%, with imports from euro area countries falling by 4.7%.
• Exports to EU countries outside of the euro area fell by 4.6%, while imports from EU countries outside of the euro area tumbled by 7.7%.
• German exports to countries outside the EU increased by 0.4%, while imports from non-EU countries surged by 14.7%.
• Exports to the US surged 10.2% in February, while exports to China declined by 0.6%.
• Imports from China jumped 16.0%, while imports from the US fell by 5.2%.

German Industrial Production

German industrial production increased by 2.1% in February, following a 1.3% rise in January. Economists forecast industrial production to increase by 0.3%.

According to Destatis,

• Production across the construction sector increased by 7.9% in February.
• Energy production slid by 6.5%.
• Production in industry, excluding energy and construction, increased by 1.9%.
• Production across the automotive (+5.7%) and chemical (+4.6%) industries contributed to the February increase in production.

ECB Monetary Policy Impact Analysis

The trade and industrial production figures are unlikely to impact investor expectations on a June ECB rate cut. ECB forward guidance continues to signal a June rate cut, with consumer price inflation trending toward the ECB target of 2%.

Wage growth, the services sector, and consumer price inflation remain the focal points for the ECB.

EUR/USD Reaction to German Data

Before the German data, the EUR/USD fell to a low of $1.08230 before rising to a high of $1.08432.

Following the release of German statistics, the EUR/USD fell to a low of $1.08339 before rising to a high of $1.08375.

On Monday, the EUR/USD was down 0.01% to $1.08352.

Up Next

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With US inflation as the focal point, FOMC member commentary also needs consideration. FOMC member Neel Kashkari is the first to speak this week.