Germany's trade surplus was larger than expected in October at E17.8bln, versus E17.0bln consensus and E16.7 prior (upwardly revised from E16.5bln).

• The uptick in the trade surplus came from a faster drop in imports (-1.2% M/M) than exports (-0.2%). However, both declines were lower in magnitude than in October (exports -2.5% M/M, imports -1.9%).
• Weakness was centred around trade with the rest of the EU, with both exports to and imports from the bloc declining vs September, -2.7% and -2.8% respectively. Non-EU trade strengthened slightly but could not make up for the EU decline (non-EU exports +2.9% M/M, imports +0.8% M/M). Imports from the Russian Federation picked up (+6.6% M/M) but are still down -90% cumulatively for 2023 YTD Y/Y.
• The trade data strengthens the view that international demand for German goods is still softening but slower than before; the November manufacturing PMI saw new orders declining at the slowest rate since 6 months.
• German factory orders data for October will be released on Wednesday (+0.2% M/M cons), with October industrial production out on Thursday (0.0% cons).

Destatis