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On February 4th, Novo Nordisk (NVO.N) shares listed in the US fell more than 13% on Tuesday after the company unexpectedly warned that its 2026 sales would decline more sharply than expected, due to price pressures impacting sales of its best-selling diabetes and weight-loss drugs in the US. The Danish company stated that it expects global sales for the full year of 2026 to decline by 5% to 13% compared to 2025 levels (excluding currency fluctuations). In contrast, sales grew by 10% in 2025. The company stated that US sales would decrease due to price reductions for drugs including Ozempic and Wegovy. They noted that the company recently reached an agreement with the Trump administration to lower drug prices. The main ingredients of these two drugs will also lose patent exclusivity in some countries outside the US, potentially opening up opportunities for low-priced generic competition. This deteriorating outlook is yet another piece of bad news for this once-rapidly growing company, a pioneer in the weight-loss drug market.The Nasdaq China Golden Dragon Index fell further to 2%, with WeRide (WRD.O) and Bilibili (BILI.O) dropping more than 5%, and Alibaba (BABA.N) and iQiyi (IQ.O) falling more than 4%.The Federal Reserve accepted a total of $1.785 billion from 18 counterparties in its fixed-rate reverse repurchase operations.On February 4th, Russian President Vladimir Putin stated on February 3rd that Russias GDP growth in 2025 is projected to be 1%, a slowdown in line with expectations. Speaking at a meeting on economic issues in Moscow, Putin said that Russias economic growth rate in 2025 will be lower than the 4.1% of 2023 and 4.3% of 2024. He stated that the slower economic growth in 2025 is in line with expectations, mainly due to specific measures aimed at reducing inflation. Putin explained that Russias inflation rate in 2025 has already fallen to 5.6%, lower than 9.5% in 2024. Furthermore, as of January 26th, Russias annualized inflation rate this year was 6.4%. Putin expects the inflation rate to potentially fall to 5% this year. Putin pointed out that Russias current task is to restore economic growth, improve the business environment, and attract investment by increasing production capacity. These measures have been incorporated into the economic restructuring plan until 2030.White House Press Secretary: U.S. Special Envoy Witkov has left and is preparing to meet with Iranian officials; negotiations are proceeding as planned.

EUR/USD Expects Fourth Weekly Gains Above 1.0900 Despite The US Dollar's Rebound Advance Ahead Of US NFP

Daniel Rogers

Apr 07, 2023 11:42

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Despite a recent retreat, the EUR/USD bulls maintain control around 1.0920. This reflects the typical Good Friday inactivity and apprehension ahead of the US Nonfarm Payrolls (NFP) report released early in the day. The major currency pair was volatile on Thursday as a result of the US Dollar's initial rebound on fears of a recession, but ended the day unchanged as disappointing US data contrasted with stronger Eurozone data.

 

Fears of a recession in the world's largest economy were prompted by consecutive lackluster US data and falling US Treasury bond yields, giving USD bears a reprieve on Thursday morning. As traders prepared for the all-important NFP, the dollar's subsequent gains were reversed by another disappointing US employment report.

 

Despite this, US Initial Jobless Claims for the week ending March 31 rose to 228K from 200K anticipated and an upwardly revised 246K the prior week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Notably, Reuters fanned fears of a recession by citing the most recent decline in the preferred bond market indicator of Federal Reserve (Fed) Chairman Jerome Powell. The most reliable bond market indicator of an imminent economic contraction, according to Federal Reserve research, is the "near-term forward spread" between the forward rate on Treasury bills 18 months from now and the current yield on three-month Treasury bills.

 

According to Reuters, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated in prepared remarks on Thursday that the global economy is projected to expand by less than 3% in 2023, a decrease from 3.4% in 2022.

 

In other news, Germany's Industrial Production (IP) increased 0.6% year-over-year in February, versus market predictions of -2.7% and previous readings of -1.7%. Additionally, the monthly figures exceeded expectations by 0.1%, coming in at 2.0% compared to 3.7% previously. On Wednesday, Germany Factory Orders for February improved to -5.7% YoY from -12.0% previously revised down and -10.5% market expectations, while MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

 

Wall Street and US Treasury bond yields have both reduced weekly losses as a result of these strategies, but investors remain skeptical.

 

In the context of less liquidity surrounding the March US employment report, sporadic activity on the major markets can keep the EUR/USD inactive and prone to abrupt price swings. Notable is the fact that recent dovish Fed forecasts and disappointing US data generate expectations for a positive surprise and enormous price volatility thereafter.


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