Seasonally adjusted results:

August: -E1.4 billion
MNI survey median: -E1.0 billion
MNI survey range: -E3.0 bln to +E0.9 bln

July: -E0.2 bln (unrevised)
June: -E1.7 bln (revised from -E1.4 bln)
May: -E2.9 bln (revised from -E2.6 bln)
April: +E0.3 bln (revised from +E0.2 bln)
March: +E0.4 bln (revised from +E0.3 bln)

Non-seasonally adjusted results:

August: -E4.3 bln
July: +E6.2 bln (revised from +E6.7 bln)
June: +E2.0 bln (revised from +E2.2 bln)
May: -E3.6 bln (revised from -E3.5 bln)
April: +E0.2 bln (revised from +E0.2 bln)
March: +E4.0 bln (revised from +E4.0 bln)
February: +E2.0 bln (revised from +E2.0 bln)
—

FRANKFURT (MNI) – The Eurozone’s trade deficit widened more than
generally expected in August, as imports grew almost twice as fast as
exports, Eurostat reported on Friday.

Exports totaled a seasonally-adjusted E132.1 billion in August, up
1.0% from July and 4.5% from 2Q’s average level. Imports rose 1.8% on
the month to E133.4 billion, up 3.9% from the second quarter average.

As a result, the trade deficit amounted to E1.4 billion after a
shortfall of E200 million in July. Without adjusting for seasonal trends
the trade balance turned negative, with a deficit of E4.3 billion after
a downwardly revised surplus of E6.2 billion in July.

Looking ahead, Eurozone exports are likely to rise further,
although slowing global growth and a surging euro should ensure that the
rate of increase will moderate significantly. Exports could even begin
to contract again.

September’s European Commission Business and Consumer Survey showed
improvements in export order books in September, signaling an overall
increase in total export volumes in the third quarter compared with the
second quarter of 2010.

Similarly, the sub-index for export orders in September’s Eurozone
manufacturing PMI remained above the 50-point level, thus signaling
expansion, but it suggested a notable deceleration. Markit Economics,
which produces the PMI index, said that new orders from abroad had
slipped to the lowest level since November.

Slowing growth among some of the Eurozone’s main export partners,
most notably the U.S., will limit any upside potential in the months
ahead.

If the sharp rise of the euro continues, it will only accentuate
the trend. The single currency has pierced the $1.40 level, and so far
it shows no sign of abating with the U.S. Federal Reserve poised for
another round of quantitative easing.

“This climb is certainly not helpful for the recovery,” European
Central Bank Governing Council member Ewald Nowotny warned last week.

Eurogroup head Jean-Claude Juncker told Market News that the
appreciation of the euro has not endangered the recovery yet,” but it
may eventually prove a problem, particularly for weaker economies in the
periphery.

A country break-down of the PMIs shows that this might already have
happened. In September, exports fell in both Ireland and Greece. For
Ireland, it was the first export drop in almost a year. Rates of
increase in France, Germany, the Netherlands and Italy were either at or
close to the weakest so far this year.

— Frankfurt bureau: +49 69 720 142; e-mail: frankfurt@marketnews.com —

[TOPICS: M$X$$$,M$XDS$]