GERMAN DATA: Exports To US Continue Large Falls In August
The German trade surplus outperformed expectations in August, at E17.2bln (seasonally-adjusted, vs E15.0bln cons) following an upwardly revised July (E16.3bln, revised from E14.7bln). The increase on a sequential comparison came as an imports decline (-1.3% M/M vs -0.5% cons, -0.7% prior, revised from -0.1%) outpaced lower exports (-0.5% M/M vs 0.2% cons, -0.2% prior, revised from -0.6%).
- As a % of nominal GDP on a 12-month rolling basis, the trade surplus extended its current downtrend, at 4.7% as of August, 1.2pp below levels seen around a year ago. That compares with a 2015 high of 8.0% and 2022 low of 2.1% (see bottom left chart).
- Across countries and back on a nominal basis, the US continues to stand out with exports to the country falling notably, sitting at their lowest since November 2021 after five consecutive sequential declines (23.6% decline vs March which was underpinned by tariff-front running).
- Exports to China recovered a little in August but likely not enough to question their longer-term downtrend after printing the lowest since August 2016 in July and having declined 26.4% if comparing the last three months to the series' highs. This decline comes against the backdrop of reports (1,2) suggesting China has built significant manufacturing overcapacity in recent years, indicated by domestic supply rising faster global demand, rising numbers of lossmaking industrial firms in the country, as well as declining capacity utilization, which may weigh on demand for German products.
- Exports to and imports from other EU countries have seen a bit of a reversal in August, falling 2.5% and 1.9% M/M, respectively, after both increasing two consecutive times in July and June. On a 6-month moving average trend basis, exports to and imports from the EU continue to be on an uptrend.
- IFO export expectations rose in September, climbing to +3.5 points, from -3.0 points in August. “A sustained upturn is not yet in sight [...] Global trade flows are currently undergoing a reshuffle. The German export industry is still searching for its role in this environment”, IFO puts the uptick into context.
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STIR: ESTR Forward Curve Remarkably Flat Over The Next Two Years
EUR STIRs remain focused on Thursday’s ECB decision. Less weak-than-expected French industrial production data had little impact on the space. Although markets continue to price a risk of one more ECB cut this cycle (in line with our policy team’s recent reporting), the forward curve over the next few years is remarkably flat.
- The 1y ESTR rate is 1.84%, while the 1y1y rate is 1.83% at typing. Over the next two years, the opposing forces of higher effective tariff rates and increased German fiscal stimulus will be key in determining whether such a flat curve shape is warranted.
- Further out, we estimate the 4y1y ESTR rate at 2.40%.
- ECB-dated OIS price 17.5bps of easing through July 2026.
- Euribor futures are flat to -2.0 ticks through the blues. Early flow has included a buyer of the 97.50 put calendar spread: ERM6/ERH6 97.50 put calendar, paper pays net 0.5 for the M6 option in 5k. This strategy looks to take advantage of steady ECB rates into Q1 2026, before the risk of hikes becomes more apparent in Q2 onwards.
- Yesterday, we sent out a summary of analyst expectations for the ECB’s September macroeconomic projections, which will likely shape the tone of Thursday’s policy statement and press conference. Overall, analysts don’t expect major revisions, but as always there are a range of estimates. See here and here.
- MNI’s full ECB preview will be released later today.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Sep-25 | 1.925 | 0.3 |
| Oct-25 | 1.910 | -1.2 |
| Dec-25 | 1.840 | -8.3 |
| Feb-26 | 1.816 | -10.7 |
| Mar-26 | 1.771 | -15.1 |
| Apr-26 | 1.760 | -16.2 |
| Jun-26 | 1.750 | -17.2 |
| Jul-26 | 1.746 | -17.7 |
| Source: MNI/Bloomberg Finance L.P. | ||
EU-BOND SYNDICATION: 5/30-year dual-tranche: Books open
5-year
- Guidance: MS + 24bps area
- Tranche Size: E5bln (MNI see potential to increase)
- Maturity: 14 October 2030
- ISIN: EU000A4EG021
30-year
- Guidance: MS + 121bps area
- Tranche Size: E5bln (MNI see potential to increase)
- Maturity: 12 October 2055
- ISIN: EU000A4EG039
For both:
- Settlement: 16 September 2025 (T+5)
- Coupon: Long first
- JLMs: Barclays / BofA / CACIB / LBBW / MS (B&D/DM)
- Timing: Books Open, Today's Business
From market source / MNI colour
SILVER TECHS: Northbound
- RES 4: $42.606 - 2.236 proj of the Jul 31 - Aug 14 - 20 price swing
- RES 3: $42.323 - 1.764 proj of the Apr 7 - 25 - May 15 swing
- RES 2: $42.000 - Round number resistance
- RES 1: $41.671 - High Sep 8
- PRICE: $41.342 @ 08:04 BST Sep 9
- SUP 1: $39.552 - 20-day EMA
- SUP 2: $38.271 - 50-day EMA
- SUP 3: $36.216 - Low Jul 31 and a key support
- SUP 4: $35.285 - Low Jun 24
Trend signals in Silver remain bullish and the metal is holding on to its recent gains. Resistance at $39.530, the Jul 23 high, has been cleared. This confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Moving average studies are in a bull-mode position, reinforcing current trend conditions. Sights are on the $42.00 handle next. Initial support to watch is $39.552, the 20-day EMA.
