The US dollar continues to lose ground this morning amid rising expectations of rate cuts by the Federal Reserve, boosting other major currencies ahead of speeches by several fed officials this week. Markets are pricing in at least a 40 per cent chance of two rate cuts before the end of this year, according to Fed fund futures. As a result, major currencies have been buoyed despite global central banks beginning to signal the start of a fresh easing cycle. Markets are watching closely as Jerome Powell is set to discuss the US economy at an event at the Council on Foreign Relations in New York today. (FT)
Pharmaceutical maker AbbVie has agreed to buy Allergan, the Irish-domiciled maker of Botox, in a $63bn deal that is the sector’s latest blockbuster transaction driven by the need to replenish drug pipelines. AbbVie is betting the acquisition will improve its offering as Humira, the world’s best-selling treatment for inflammatory diseases, is set to face competition from generic versions as the drug goes off patent in the US. The deal will see AbbVie pay $188.24 for each share of Allergan, and the offer values Allergan at a 45 per cent premium to its closing price a day earlier. (FT)
President Donald Trump’s announcement of sanctions on Iran’s supreme leader, Ayatollah Ali Khamenei, seem to be a tactic aimed at annoying Iranians rather than doing any real damage to the country’s already battered economy. If that was the idea, it has been a complete success, with state media saying the move has permanently closed the diplomatic path. Oil, which had risen strongly on tensions in the region, was broadly unchanged this morning as traders do not see much escalation in the latest diplomatic wrangling, while looking for more details on a possible output deal from OPEC. (Bloomberg)
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.