Euro area exports come in subdued at start of year

Euro area had a relatively subdued start to the year for exporters and saw a marked deterioration in the overall trade balance. Especially, the headline trade surplus dropped over EUR 22 billion from December to just EUR 3.3 billion, the smallest in a year. However, the very sharp deterioration greatly saw seasonal factors.

Adjusting for those, the reduction in the size of the surplus was more modest, falling slightly over EUR 3 billion to a three-month low of EUR 19.9 billion, a level still slightly above the 2017 average.

Moreover, in adjusted terms, after solid growth in shipments in each of the earlier two months, the value f exports fell 0.7 percent sequentially and rose 7.4 percent year-on-year. In the meantime, imports rose for the fourth straight month, rising 1.1 percent sequentially and 5.2 percent year-on-year.

Looking through the monthly volatility, the trends for exports and imports seem to stay favorable. Indeed, on three-month basis, exports were still up a solid 4 percent, whereas imports rose 4.2 percent. And while the strength of euro poses a downside risk and surveys pointed to a weakening in growth in new orders in February, most indicators point to comparatively strong growth in goods exports ahead, stated Daiwa Capital Market Research in a report.

At 18:00 GMT the FxWirePro's Hourly Strength Index of Euro was slightly bullish at 69.486, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearishs at -52.8593. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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