German Trade Balance Better than Expected; Export Numbers Break Negative Trend
THE TAKEAWAY: German trade numbers better than expected -> Risk sentiment bolstered after positive US job data -> Euro gaining steam as players move out of safe dollar
German trade balance for September came in today at EUR11.8B, higher than the expected EUR9.0B and above August’s figure which was revised to EUR10.5B. Exports, which were expected to be weak following a bleak month for German industry, grew 3.5% versus the projected figure of 1.1%, while imports dropped to flat, slightly lower than the expected 0.6%.
European economic data has been coming out better than expected so far this week, with French industrial production showing a growth of 0.5% as opposed to the expected drop of -0.7%. The Euro closed strong last Friday given heightened risk sentiment following better-than-expected US job data, and equities and commodities all entered European trade slightly higher today.
Also assisting risk sentiment this weekend was news that Germany’s Merkel and France’s Sarkozy have agreed to a comprehensive European bailout plan – previous disagreements had centered on the proportion of losses to be born by private banks versus the public sector.
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