German exports still struggling on the back of weak Chinese data

While the German trade data remains suppressed, temporary weakness in China linked to the New Year has probably distorted data to some extent. Exports in Q1 looks set to be much weaker than what could have been expected in view of the significant weakening of the euro to date. 

Imports should benefit from the ongoing strengthening in German domestic demand, coming from robust real income growth,lower oil prices, and favourable financing conditions.

According to Societe Generale, German trade surplus for Feb is likely to have amounted to €18.9bn, up from €15.9bn in January. Exports are expected to have declined by 0.6% mom, following the larger than expected decline in January (-2.1%), while imports are expected to have increased by 0.4%, boosted by strong domestic consumption.