Release Explanation: Measures the country’s exports minus its imports and its the largest component of a country’s balance of payments. An increase or decrease in the Trade Balance will help determine the future economic outlook and growth numbers in a region. It can influence all aspects of an economy as it is the way that region balances its books.

Trade Desk Thoughts: The Euro-area adjusted trade balance was released at -0.3B in December, much better than expected. In December 2008 compared with November 2008, seasonally adjusted exports fell by 0.9% and imports by 3.9%.

An analysis of the trade balance over the January-December 2007 and 2008 periods show that imports rose at a faster pace than exports mainly due to the energy component, which is also the biggest module of the trade balance. December was the sixth consecutive month in which the Euro-area ran a trade deficit, seasonally adjusted data, even though the trade deficit is getting smaller.

Forex Technical Reaction: Immediately after the release, the euro spiked 40-pips. Since the new trading day began, the euro has fallen 150 pips, near TheLFB S3 (1.2640). Against the pound, the euro fell 100 pips today.