Markets Today: German PPI Falls Most in 9 Months, European Stocks Rise and DAX Eyes Fresh ATH

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Asian Market Wrap

In Asia, stocks rose 0.4%, with TSMC reaching a new high on optimism about AI spending.

MSCI's broad Asia-Pacific index (excluding Japan) rose 0.7%, reaching its highest level since late 2021, with a weekly gain of 1.5%.

In contrast, Japan's Nikkei fell 0.2%, and the yen weakened 0.1% to 148.77 per dollar, down 0.7% for the week. This came after polls suggested Prime Minister Shigeru Ishiba's coalition might lose its majority in Sunday's election.

US and European stock futures rose, suggesting the global stock rally could continue as strong economic data eased concerns about the US economy.

S&P 500 and Nasdaq 100 futures gained 0.2% after both hit record highs on Thursday, while European futures climbed 0.4%.

The Dollar recovered earlier losses and stayed flat after Fed official Waller suggested cutting interest rates this month to support a weak labor market. Treasury yields rose across the board. Cryptocurrencies also gained after Congress passed the first federal law on stablecoins.

A White House move on US chip restrictions, impacting Nvidia and AMD, has fueled speculation about a major tech deal between the US and China.

Meanwhile, analysts expect the ECB to delay its final rate cut until December, without signaling the end of easing.

German PPI Falls 1.3% YoY, the Most in 9 Months

Producer prices in Germany dropped 1.3% in June 2025 compared to last year, following a 1.2% decline in May, as expected. This marks the fourth month in a row of falling prices and the biggest drop since September 2024, mainly due to a 6.4% fall in energy costs.

In the energy sector, electricity prices fell 8.8%, mineral oil products 7.7%, natural gas 6.9%, heating oil 6.4%, and motor fuel 4.2%. Prices for intermediate goods also fell by 0.4%.

On the other hand, prices rose for non-durable consumer goods (3.6%), durable consumer goods (1.7%), and capital goods (1.7%). Excluding energy, producer prices increased by 1.3%, the same as in May.

Month-on-month, producer prices rose 0.1% in June, slightly beating expectations of no change, and rebounded from a 0.2% drop in May. This was the first monthly increase in seven months.

European Open

European stocks rose on Friday, heading for small weekly gains, as investors focused on corporate earnings to assess the impact of US tariffs on businesses.

The STOXX 600 index climbed 0.3% to 548.84 points, set for its second weekly gain. Other major indexes, including Germany's DAX, France's CAC 40, and Britain's FTSE 100, also saw modest increases.

Swedish defense company Saab jumped 12.7%, leading the STOXX 600, after reporting better-than-expected second-quarter earnings and raising its sales outlook.

Danish wind turbine maker Vestas gained 8.8% after J.P. Morgan upgraded its rating to "overweight" from "neutral."

On the downside, GSK dropped over 6% after a U.S. FDA panel advised against approving its blood cancer drug Blenrep.

Swedish appliance maker Electrolux fell 14.6% following weak second-quarter results in Europe. Meanwhile, India's Reliance Industries announced its retail unit had acquired Kelvinator from Electrolux.

On the FX front, the dollar index, which tracks the US dollar against six major currencies, rose to 98.57 by 0534 GMT. It’s set for a 0.72% weekly gain, adding to last week’s 0.91% increase.

On Thursday, the index hit 98.951, its highest since June 23, after US data showed stronger-than-expected retail sales in June and a drop in unemployment claims to a three-month low.

The euro rose 0.16% to 1.1617, recovering from Thursday’s three-week low of 1.1556, but is still down 0.65% for the week.

The British pound stayed flat at 1.3418, heading for a 0.53% weekly loss.

Bitcoin increased 0.82% on the day, trading around 120,460.

Currency Power Balance

Source: OANDA Labs

Gold prices have risen after the European open, peaking around the $3350/oz handle. As things stand, Gold remains choppy as markets weigh up what trade deals may entail. A catalyst at this stage is sorely needed.

Economic Data Releases and Final Thoughts

Looking at the economic calendar, there is some medium and high impact data from the US later in the day.

Earnings season continues and we will get further insight into University of Michigan inflation expectations which have risen considerably in 2025. With trade deals upon us and the recent inflation print now out, will we see an improvement in inflation expectations.

We will also hear from Fed policymaker Waller today ahead of the Feds blackout period which starts tomorrow.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - DAX Index

From a technical standpoint, the DAX index has remained cautious and rangebound since Mondays retest of the key 24000 handle.

The index has finally moved higher over the last two days and is now eyeing a retest of all-time highs.

If earnings releases continue in a similar vein there is every reason to believe that fresh all-time highs will materialize.

Immediate resistance rests at 24654 before the 24750 and 25000 handles come into focus.

Support may be located at 24325 before the confluence level at 24000 comes back into play

DAX Daily Chart, July 18. 2025

Source: TradingView.com (click to enlarge)

Client Sentiment Data - DAX Index

Looking at OANDA client sentiment data and market participants are short on the DAX Index with 86% of traders net-short. I prefer to take a contrarian view toward crowd sentiment and thus the fact that so many traders are short means the DAX Index could rise in the near-term.

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

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