Brexit seen weighing on German trade surplus

Germany's trade surplus continued to grow in January as both exports and imports clocked in with strong gains, but economists said lower demand from the UK would cut into it over the coming months and quarters.

In seasonally adjusted terms, sales of goods and services overseas rose 2.7% month-on-month, even as imports increased by a hefty 3.05 versus December.

That saw the surplus fatten from an upwardly revised €18.3bn for December to €18.5bn in January, ahead of market forecasts calling for €18.0bn.

In comparison to a year ago, the trade surplus was 12.1% higher.

Without seasonal adjustment the surplus slipped from €24.8bn at the end of 2016 to €14.8bn in January.

"Overall, the smoothed nominal German trade surplus has lost slight momentum since the summer, and we think this trend will continue in the next six months as demand in the U.K. slows. Finally, these data did not solve the mystery of what happened in Q4. Revisions were marginal, and our estimate continues to suggest that net trade rose slightly in contrast to the GDP report which showed a slight fall," said Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics.