German Trade Surplus and Exports Declined in August

Arthi Gupta
08 Oct, 2010
New York City

The European indexes rose after German manufacturing turnover improved but trade surplus and exports declined in August. French budget deficit widened in August but industrial confidence gained in September.

[R]4:00 PM Frankfurt – The European indexes rose after German manufacturing turnover improved but trade surplus and exports declined in August. French budget deficit widened in August but industrial confidence gained in September.[/R]

U.S. stocks edged lower after non-farm payroll employment fell 95,000 in August and Asian markets traded mixed.

Finance ministers and central bankers from around the world are gathering in Washington today to attend the annual meeting of the International Monetary Fund and the World Bank amid growing fears the world''s economic powers are heading towards a ""currency war.""

In Paris CAC 40 Index decreased 2.68 or 0.06% to close at 3,767.57 and in Frankfurt DAX Index edged lower 2.16 or 0.03% to close at 6,274.09. For the week, the CAC 40 Index gained 1.96% and the DAX Index declined 0.11%.

Portugal''s industrial new orders increased in the three months ended in August and Swiss unemployment declined in September.

The European Central Bank President Jean-Claude Trichet told reporters that the current key ECB interest rate remains appropriate and reaffirmed the U.S. view that a strong dollar is in the U.S. interest.

He noted that the Governing Council continues to expect price developments to remain moderate over the policy-relevant medium-term horizon. Furthermore, he added, excessive currency movement has adverse implications and exchange rates should reflect economic fundamentals.

Riksbank''s First Deputy Governor Svante Oberg said on Thursday that the Swedish central bank should raise its benchmark repo rate further in the coming months, as the Swedish economy is growing strongly.

The Committee of European Banking Supervisors has been meeting in London to implement new rules agreed by the EU over the summer, the Financial Times reported.

The new rules would reportedly apply to global operations of EU-based banks and also to subsidiaries operating in EU. The draft regulations require banks to set a maximum ratio between salary and bonuses. This acceptable ratio will possibly depend on each national regulator''s view on whether a bank under their supervision is effective in linking pay to performance and risk, the FT added.

Germany''s trade surplus declined to €9 billion from €13.5 billion in July, the Federal Statistics Office said today.

German exports increased to €75.1 billion and imports were €66.1 billion in August.

Exports dropped 0.4% in August on a monthly comparison after easing 1.6% in July. On an annual basis, exports climbed 26.8% in August, following July''s 18.6% rise.

Exports to euro-zone increased 16.5% annually and those to non-euro area nations gained 22.2% in August. Shipments to countries outside the European Union rose 40.8% in August.

Germany''s manufacturing sector turnover grew by a real 1.8% on a monthly basis in August, following a revised 0.6% drop in July, according to data from the Federal Statistics Office released today.

Domestic turnover advanced 0.2%, while the increase in business with foreign customers was 3.5% in August.

According to another report from the Federal Statistical Office released today, German corporate insolvencies declined 9.4% in July from the corresponding period of 2009. The total number of insolvencies dipped 5% and insolvencies of consumers decreased 2.3%.

German insolvency courts reported 14,431 insolvencies in July, within which 2,760 cases were related to enterprises and 9,344 to consumers.

The French budget balance showed a shortfall of €122.1 billion in August compared to a deficit of €93.1 billion in the previous month, according to data from the Budget Ministry released today. However, it narrowed from last year''s level of €127.4 billion.

The Bank of France said the business climate indicator for the industry edged up to 102 from 101 in August. The central bank said there is likely to be an ongoing improvement in output growth in the short term, though at a less sustained pace.

Portugal''s industrial new orders increased in the three months ended in August from the previous year, according to a report by the Statistics Portugal released today.

Industrial new orders climbed 5.7% on an annual basis in the three months ended in August, compared to a 5.3% rise in the three months ended in July. A year earlier, new orders slipped 25.1%.

Switzerland''s jobless rate fell to 3.5% in September, the State Secretariat for Economic Affairs said today. On a seasonally adjusted basis, the unemployment rate was 3.7% in September as against 3.8% in August.

Registered unemployed in September was 140,040, down 2,839 from August.

Gainers & Losers

Air Liquide SA gained 0.44% to €91.45 after the industrial gas maker said it would participate in the development of FutureGen 2.0 - the world''s first full scale oxy-combustion power plant incorporating permanent CO2 capture and storage.

Compagnie des Alpes SA fell 0.29% to €20.45 after the French ski resorts operator raised €200 million by selling seven-year bonds according to media reports.

Sage Group PlLC slumped 4.4% to 270.20 pence after the software firm was downgraded by UBS AG.

Siemens AG, the electronics and electrical engineering declined 0.30% to €76.79 after its energy unit won a follow-up order for 72 of its 2.3 megawatt wind turbines for the Comber Wind Limited Partnership Project in Essex County, Ontario.

Worthington Group plc plunged 17.19% to 13.25 pence after the property development and management company said that David Shalom resigned as Finance Director with immediate effect.