Aurelia Butler

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Argentina’s libertarian President Javier Milei is slowing the monthly devaluation of the peso, extending an unorthodox currency policy that he says is essential to ending the country’s inflation crisis.Milei last year allowed the peso’s official exchange rate to weaken by just 2 per cent a month, or 22.8 per cent over the year, despite consumer prices rising 117 per cent in 2024 compared with 2023. That caused the peso to appreciate more than any other currency in real terms last year, fuelling concerns about the competitiveness of Argentine businesses among some economists.The so-called crawling peg devaluation will slow to 1 per cent a month starting in February, Argentina’s central bank said on Tuesday.The move aims to consolidate a dramatic fall in monthly inflation that has been Milei’s biggest achievement since he took office amid a dire economic crisis in late 2023.The month-on-month inflation rate has fallen from a peak of 26 per cent in December 2023 to 2.7 per cent in December 2024, largely thanks to Milei’s sweeping austerity programme. Authorities argue the 2 per cent devaluation has become one of the main drivers of continued price pressures.“With the attention set on midterm elections [in late 2025], where Milei-backed candidates will likely perform well, officials want to ensure that inflation remains under control,” said Luciano Sigalov, an analyst at Bull Market Brokers in Buenos Aires.Milei has described slowing the devaluation as an important step on the road to removing Argentina’s strict currency and capital controls, a top concern for foreign investors, which he has pledged to do in 2025.However, the slower crawling peg will also hasten the real appreciation of the peso and delay the rebuilding of Argentina’s central bank negligible foreign currency reserves, which “the market has identified as the biggest risks of Milei’s programme”, said Nery Persichini, head of research at financial services firm GMA Capital.Rapid real peso appreciations under previous Argentine governments have ended in abrupt devaluations and economic turmoil, when the central bank ran out of cash to prop up the strong currency.Milei has argued that a faster devaluation of the peso would set off a fresh bout of inflation, derailing the successful macroeconomic stabilisation that allowed Argentina to emerge from a recession in the third quarter of 2024.He says Argentina must retain competitiveness by deregulating the economy and lowering taxes and corporate borrowing costs, rather than devaluing the currency.The weakening of the real in neighbouring Brazil and low global prices for Argentine exports such as soy, which could hurt export revenue, as well as the strengthening of the US dollar, will put more pressure on Milei’s currency strategy in the coming months, Persichini said.“But the government’s success on inflation has [saved] Argentina from a bigger crisis and that’s what they want to keep prioritising,” he added. “They believe this is a risk worth taking, and it’s a risk they can manage.” More

The import price index, in terms of local currency, rose 7.0% in December from a year earlier, the fastest since last July, according to the Bank of Korea.It was the second consecutive month of gains in import prices, which affect consumer prices with a time lag, after a rise of 2.8% in November. The won ended December down 5.2% against the dollar, marking its largest monthly decline in 22 months, after reaching its weakest level since March 2009 due to domestic political turmoil. Last month, South Korea’s consumer inflation quickened to 1.9%, exceeding market expectations and near the BoK’s 2% target, with the central bank flagging a possibility of inflation accelerating further this month. The BoK is expected to lower interest rates by a quarter percentage point to 2.75% on Thursday, a month earlier than previously anticipated, to support a struggling economy amid risks from political uncertainty.The export price index rose 10.7% last month, also the fastest in five months, after climbing 7.0% in November. More

(Reuters) -Prime Minister Justin Trudeau, facing disagreements over how Canada should respond to threatened U.S. tariffs, will hold a cabinet retreat next week focused on defending Canadian interests, his office said on Tuesday.U.S. President-elect Donald Trump has promised to impose a 25% tariff on imports from Canada, which economists say would trigger a deep recession. Canada sends 75% of all exported goods and services to the United States. “Cabinet will protect and defend Canadian interests, strengthen Canada’s relationship with the U.S., and make unequivocally clear the mutually beneficial trade and security relationship the two countries share,” Trudeau’s office said.Trudeau, who will step down as prime minister in early March, is promising countermeasures if Trump carries out his threat and wants a united response from the federal government and 10 provinces. But splits are emerging and some provinces are unhappy with what they see as a lack of leadership from Ottawa.”The federal government … need to get their act together,” Ontario Premier Doug Ford (NYSE:F) said. Ontario, the most populous province and Canada’s industrial heartland, could lose up to 500,000 jobs if tariffs are imposed, he said.The premiers are due to meet Trudeau in Ottawa on Wednesday to discuss the potential tariff response.”We can’t have a divided Canada. We have to make sure we all stick together,” Ford told reporters.On Sunday, Foreign Minister Melanie Joly said Canada was not ruling out curbing energy exports to the U.S.But Danielle Smith, premier of oil-producing Alberta, predicted there would be a national unity crisis if Ottawa tried to shut off crude exports.”We won’t stand for that,” Smith said on Monday after meeting Trump in Florida. “I can’t predict what Albertans would do.”The Jan. 20-21 cabinet meeting will coincide with Monday’s inauguration of Trump, who is unhappy at what he says is lax security on the joint border. He has also mused about making Canada the 51st state.Canada responded by unveiling a C$1.3-billion ($909 million) border-security plan, with an emphasis on surveillance, intelligence and technology. More

SAN FRANCISCO (Reuters) – The biopharmaceutical industry is aiming for a 2025 reversal of last year’s slump in investor returns but remains wary over what President-elect Donald Trump’s priorities might be on hot button issues such as drug pricing reforms and vaccines.The pharma industry faced its biggest regulatory change in decades with the Biden Administration’s Inflation Reduction Act of 2022, which allowed the federal government’s Medicare health plan for the first time to negotiate prices for its costliest prescription drugs.”Nothing kills investment like uncertainty. The IRA led to a lot of uncertainty in the sector,” Steve Ubl, head of industry lobbying group PhRMA, said at the JP Morgan Healthcare Conference this week in San Francisco.PhRMA is hopeful the new administration will be less focused on “attacks to the ecosystem” of the industry and instead seek to reduce inefficiencies that would lower costs for patients, he said.Prices for the first 10 Medicare-negotiated drugs were released last August, with the results largely in line with existing prices after discounts and rebates.Names of the next 15 drugs up for price talks are due by Feb. 1 and could be announced this week, although it is also possible that the final list could change after Trump takes office on Jan. 20.Last year, the Nasdaq Biotechnology Index fell 3%, compared with a gain of 23% for the bellwether S&P 500 and a jump of nearly 29% for the tech-laden Nasdaq. The NYSE Arca Pharmaceutical (TADAWUL:2070) Index rose 1%.The discrepancies came despite all-time stock price highs hit by obesity drug manufacturers Novo Nordisk (NYSE:NVO) and Eli Lilly (NYSE:LLY). Lilly ended 2024 with a gain of 31%, while shares of Novo, which posted underwhelming trial results for a next-generation weight-loss drug, fell 9%.”Growth has been uneven across the sector. There are haves and have nots” as investors assess how drugmakers cope with looming patent expirations, said Roel Van den Akker, pharma deals leader at PwC.PATENT EXPIRATIONS Morgan Stanley (NYSE:MS) estimates that around $175 billion of 2025 U.S. large-cap biopharma revenue – 35% of the total – will go off patent by the end of the decade. To replace that revenue drugmakers need new products, either from their own research or by acquiring companies with promising assets, but those transactions slowed significantly last year.The value of life sciences mergers and acquisitions totaled around $80 billion in the year through November, less than half of 2023’s total, according to the Iqvia Institute for Human Data Science. No deals over $5 billion closed last year.The expectation that the next chair of the Federal Trade Commission will be more deal-friendly than Lina Khan has been is viewed as positive for drugmakers.On Monday, a flurry of deals were announced including a $14.6 billion acquisition by Johnson & Johnson (NYSE:JNJ).Trump nominated current Commissioner Andrew Ferguson to succeed Khan. Investors are less enthusiastic about some of Trump’s other high-profile nominations to top positions in his next administration.”RFK’s views on vaccines could certainly impact some of the major pharmaceutical companies,” said Foley Hoag partner Beth Neitzel, referring to Trump’s pick to lead Health and Human Services, Robert F. Kennedy Jr, who has been an outspoken vaccine skeptic.”I think the objective will also be to find common ground. Making America healthy is what we are all about,” Biogen (NASDAQ:BIIB) CEO Chris Viehbacher said in an interview during the conference.PHARMA EXECS TO EXERT INFLUENCE Pfizer (NYSE:PFE) CEO Albert Bourla underscored the industry’s uncertainty in his session at the conference with investors, but said on Monday he would try to influence the environment. “There are several people that think, for our industry, the risks outweigh the opportunities. There are other people, among them myself, which they think that the opportunities outweigh the risks. I guess we will see,” he said.J&J CEO Joaquin Duato told investors “it’s difficult for me to estimate what’s going to happen,” adding that he would be pushing policies with the Trump administration on innovation and access.Investors are focused on the impact of government policy on drug prices, including any changes to the IRA that could affect how quickly individual medicines become eligible for Medicare price negotiations.Those changes would be difficult to make because they are written into the law, said Priya Chandran, biopharmaceuticals sector leader at Boston Consulting Group.”It is unlikely that anything is going to drastically change in the first year,” she said.Foley Hoag’s Neitzel said reports of Trump’s “warm and cordial” December dinner with pharmaceutical executives in Florida have led to some optimism.However, “the pretty universal statements by both Trump and RFK in the past about drug pricing do not suggest that this incoming Trump administration is going to be helpful to the industry,” she said. More