Germany’s import price index for June stayed the same at 0.0%, missing the expected drop of 0.2% for the month. This comes after a decline of 0.7% in the previous month. Year over year, import prices fell by 1.4%. This decrease is mainly due to a 13.6% drop in energy prices over the same period. However, energy prices rose by 3.4% in June compared to the previous month, which affected the overall import price. Excluding energy, import prices actually fell by 0.4% for the month.

Underlying Weakness And Energy Costs

The latest import price data for June 2025 may look flat, but it’s misleading. The 3.4% monthly rise in energy costs masks broader weakness in the economy. When we remove energy from the equation, import prices decreased by 0.4%, signaling weak demand. This detail matters for those monitoring the European Central Bank, suggesting they may be less aggressive with interest rates. Therefore, it’s wise to consider strategies that benefit from a cautious central bank. For instance, buying German Bund futures could be a smart move, as bond prices typically rise when rate hike expectations drop. For currency traders, this points to potential weakness in the Euro. Although the headline number might cause a brief rally, the trend of weak import demand suggests a downward move for the currency. We believe that buying EUR/USD put options is a sensible strategy for the next few weeks, particularly if the pair gains on the headline news.

Warning For German Stocks

This sign of weak demand is a warning for German stocks. Recent data, such as the flash manufacturing PMI for July 2025, which came in at a contractionary 47.9, indicates that the industrial sector is struggling. This reinforces the argument for buying put options on the DAX index to protect against potential downturns from poor corporate earnings. We’ve seen similar patterns before, especially during the economic slowdown of 2023. At that time, markets learned to overlook volatile energy prices and focus on core inflation trends. Those who acted early in anticipation of a more dovish central bank were rewarded. Create your live VT Markets account and start trading now.

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