The US trade deficit unexpectedly narrowed to $29.4 billion in October, the lowest level since the 2009 financial crisis. On a month-over-month basis, the decline reached 39%, which looks quite impressive.

On the surface, the numbers do look bright—exports increased by 2.6% month-over-month, while imports actually fell by 3.2%. But digging a little deeper, things are not that simple.

What was the main driver behind this narrowing of the deficit? A sudden surge in gold exports, coupled with pharmaceutical companies reducing imports due to tariff expectations. In other words, this is more of a short-term reaction to policy fluctuations rather than a genuine improvement in economic fundamentals.

The key issue here is: although the monthly data looks good, when viewed on an annual basis, the trade deficit remains high. What does this indicate? It suggests that this improvement is likely just a fleeting phenomenon, caused by external factors (policy expectations, exchange rate fluctuations) leading to short-term disturbances, rather than a trend reversal driven by economic structural improvements.

For the market, such short-term data fluctuations should be treated with caution. The real long-term influence still depends on fundamental trends.