Canadian GDP Softens In October But Early Data Points To A November Recover

Economic

Summary:

Canada's gross domestic product report for October on Tuesday will mark Statistics Canada's final major data release of 2025, and we anticipate a 0.2% decline in growth.

It's slightly higher than StatsCan's preliminary estimate released a month earlier for a 0.3% contraction. If October's decline is realized, it would represent the steepest monthly drop in GDP since February.

Still, early indicators such as hours worked and our tracking of consumer spending suggest a possible recovery in November. We continue to expect a soft 0.5% annualized increase in GDP for Q4.

In October, we see weakness mostly from goods-producing sectors, while output among service industries remained essentially unchanged.

Non-conventional oil production in Alberta contracted sharply (-5%) in October after four consecutive months of expansion. Manufacturing output declined as well, partially reversing September's gains. StatsCan's October mineral production data indicated modest recovery in mining output, following declines in the prior two months, helping to cushion some weaknesses in other sectors.

For services, home resales rose 0.8% month-over-month in October, bolstering real estate activity. Arts and entertainment saw a boost from the Blue Jays' playoff run, although the gain was likely reversed quickly in November. Offsetting stronger activities was the Alberta's teacher strike temporarily weighing on education services. Wholesale and retail volumes also fell, by 0.7% and 0.6% respectively.

Early November indicators suggest signs of stabilization. Hours worked increased a larger 0.4%, and our tracking of RBC consumer spending data indicates continued strength, especially in discretionary purchases as the holiday shopping season ramps up. This is consistent with StatsCan's advance retail indicator, which shows sales rebounded by 1.2% in November. Overall, we continue to expect modest growth in Q4.

Week ahead data watch:

Delayed Q3 U.S. GDP report will be released on Tuesday after the U.S. government shutdown. We look for headline GDP growth of an annualized 2.5% quarter-over-quarter—a deceleration from Q2's 3.8%. Much of Q3's expansion was driven by household consumption, particularly within services. Excluding volatile net trade, final domestic demand likely remained resilient, albeit growing slightly slower than in Q2.

Source: ACTIONFOREX

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Daniel Carter

Economic

U.S. President Donald Trump is expected to announce on Friday new agreements aimed at lowering prescription drug prices, the White House said.

The announcement is scheduled for 1 p.m. ET at the White House.

AbbVie (ABBV.N), opens new tab, Bristol Myers Squibb (BMY.N), opens new tab, Gilead Sciences (GILD.O), opens new tab, and Merck (MRK.N), opens new tab are among major drugmakers expected to announce deals to cut prices on some medicines, according to sources familiar with the matter.

Swiss drugmakers Novartis (NOVN.S), opens new tab and Roche (ROG.S), opens new tab are also expected to participate, Bloomberg News reported earlier this week. Reuters previously reported that AbbVie was among the companies involved.

In July, Trump sent letters to leaders of 17 major pharmaceutical companies, outlining how they should provide so-called most-favored-nation prices to the U.S. government's Medicaid health program for low-income people, and guarantee that new drugs will not be launched at prices above those in other high-income countries.

So far five companies have struck deals with the administration to rein in prices. They are Pfizer, Eli Lilly (LLY.N), opens new tab, AstraZeneca (AZN.L), opens new tab, Novo Nordisk (NOVOb.CO), opens new tab and EMD Serono, the U.S. division of Germany's Merck KGaA (MRCG.DE), opens new tab.

The remaining 12 are Sanofi (SASY.PA), opens new tab, Regeneron (REGN.O), opens new tab, Merck (MRK.N), opens new tab, Johnson & Johnson (JNJ.N), opens new tab, AbbVie (ABBV.N), opens new tab, Amgen (AMGN.O), opens new tab, Gilead (GILD.O), opens new tab, Boehringer Ingelheim, Bristol Myers (BMY.N), opens new tab, GSK (GSK.L), opens new tab, Novartis, and Genentech, Roche's U.S. unit.

Bristol Myers, Gilead and the White House did not immediately respond to requests for comment. AbbVie and Merck declined to comment.

Novartis has said it is in discussions with the Trump administration and is committed to finding solutions that lower costs for Americans. Roche said it supported Trump's goal of reducing the cost of drugs and encouraged other countries to reward biopharmaceutical innovation.

Trump has long focused on the disparity between drug prices in the U.S. and other wealthy countries, which have government-run health systems that negotiate price discounts.

The specter of tighter price controls by the U.S. government initially spooked investors, but terms of the deals announced so far calmed many of those fears.

Analysts have noted that Medicaid, which accounts for only around 10% of U.S. drug spending, already benefits from substantial price discounts, exceeding 80% in some cases.

Pfizer, which announced its 2026 financial outlook on Tuesday, said the Medicaid discounts would result in price and margin compression next year.

Source: Reuters

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Justin

Economic

The final print for UMich's sentiment survey for December was a doozy...

While the headline sentiment gauge and Expectations ticked up, Current Conditions slipped further...

...to an all-time record low... yes... worse than during Oct 1987's crash, 9/11, the GFC, and COVID...

This - as you might guess - is very unusual with stocks at record highs and as we have labored extensively this year, UMich's survey seems rife with bias

UMich claims that post-pandemic frustration with high prices persists...

Which is incredible since inflation expectations are plunging...

As Democrats realize their TDS-driven hyperinflation fears were utter bullshit after all (shame on all those MSM pundits)...

Buying conditions for durable goods fell for the fifth straight month, whereas expectations for personal finances and business conditions rose.

"Despite some signs of improvement to close out the year, sentiment remains nearly 30% below December 2024, as pocketbook issues continue to dominate consumer views of the economy," Joanne Hsu, director of the survey, said in a statement.

Labor market expectations lifted a bit this month, though a solid majority of 63% of consumers still expects unemployment to continue rising during the next year.

Hsu concludes: "This year, we saw a spike in inflation expectations that softened very quickly, while high-price mentions have remained consistently high. It appears that consumers have yet to internalize the post-pandemic level of prices as a new normal, which influences how they view the economy."

Source: Zero Hedge

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Winkelmann

Political

Economic

European Union (EU) countries on Thursday approved a deal to delay the anti-deforestation law by a year following pushback from industry and concerns the digital system to enforce it was not ready, the Council of the EU said, clearing the final legal hurdle for the delay to pass into law.

The world-first policy would ban imports into the EU of cocoa, palm oil and other commodities linked to forest destruction, requiring foreign exporters of these commodities to provide due diligence statements proving their products did not contribute to forest destruction.

Originally due to apply from December 2024, the law was designed as a key plank of the EU's green agenda. Brussels had already delayed it by a year, but that did not quell opposition from industry and trade partners including Brazil, Indonesia and the US, which said complying with the rules would be costly and hurt their exports to Europe.

Under the amended EU law, large companies will now have to comply from December 30, 2026, followed by smaller firms with a turnover of less than €10 million (RM47.88 million) in the products affected, from June 30, 2027.

The EU proposed delaying the law for a second time in September, citing concerns about the readiness of information-technology systems needed to support it.

Food majors such as Nestle, Ferrero and Olam Agri had warned that further delays to the law endangered forests worldwide. The policy aims to end the 10% of global deforestation fuelled by EU consumption of imported goods.

Source: Theedgemarkets

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Adam

Economic

President Trump's team quickly went all out to highlight Thursday's better-than-expected inflation print, while economists were just as quick to warn not to read too much into the numbers.

One White House social media account posted about inflation and prices 14 times in the first two hours after the news was released at 8:30 am ET that the Consumer Price Index (CPI) rose 2.7% over the previous year in November.

The reading was well below expectations of a 3.1% increase.

"Americans can expect this trend of lower prices and bigger paychecks to continue into the New Year," White House press secretary Karoline Leavitt even went so far as to promise.

The news helped stocks to jump on Thursday, and the relief rally looked set to continue on Friday.

Economists, meanwhile, were far more restrained, repeatedly cautioning that the data — which was disrupted and delayed by the government shutdown and offered no month-on-month reading from September — may be unreliable.

Olu Sonola, head of US economic research at Fitch Ratings, called the report "positive news overall," but quickly added that the data was less detailed than normal because of the shutdown. "We'll need to wait until next month for a clearer read on inflation."

As RSM's Joe Brusuelas added in his own note: "One should proceed with caution around making policy and investment judgements around the November inflation data."

The day before the inflation report hit, Trump addressed the nation Wednesday night and claimed "inflation has stopped" as he repeatedly tried to blame Joe Biden for price increases that have stoked American anxieties this year.

By Thursday morning, many Trump officials were working to highlight how real wages — the measure of inflation against wage increases — have shown steady improvement throughout 2025.

Data from the Federal Reserve Bank of St. Louis show that median weekly real earnings dropped during the inflation spike early in Biden's term and have been steadily rising ever since 2022.

Less in focus from Trump and his team this week are new Labor Department numbers released Tuesday that found the nation's unemployment rate has crept up to 4.6%, the highest level in four years.

During Wednesday night's speech to the nation, the president continued trying to address Americans' worries around affordability, announcing new checks to military members, dubbed a "warrior dividend."

Less in focus from Trump and his team this week are new Labor Department numbers released Tuesday that found the nation's unemployment rate has crept up to 4.6%, the highest level in four years.

Source: finance.yahoo

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Daniel Carter

Political

Russia-Ukraine Conflict

President Vladimir Putin offered no compromise on Friday on his terms for ending the war in Ukraine and accused the European Union of attempting "daylight robbery" of Russian assets.

As U.S. President Donald Trump seeks an end to Europe's deadliest conflict since World War Two, Putin said the onus was on Ukraine and Europe to make the next move towards peace.

"President Trump is making serious efforts to end this conflict. He is doing so with complete sincerity," Putin said.

"The ball is entirely in the court of our Western opponents, primarily the leaders of the Kyiv regime, and in this case, first and foremost, their European sponsors. We are ready for both negotiations and a peaceful resolution to the conflict."

Trump is pushing for a peace deal on terms that Ukraine and its European allies fear will be slanted towards Russia. Kyiv has long called for a ceasefire and said it does not believe that Putin, who sent tens of thousands of troops into Ukraine in February 2022, is serious about seeking peace.

PUTIN HOLDS MARATHON PRESS CONFERENCE

Putin was addressing an annual press conference and "Direct Line" phone-in that ran for almost 4-1/2 hours. While Ukraine was the dominant topic, the event was punctuated by bizarre moments and occasional barbed comments from ordinary Russians whose text messages were flashed up on a big screen in the hall.

"Not a direct line but a circus," one message read. Others complained about internet outages, dirty tap water and the cost of living.

Putin said Russia's terms for ending the war in Ukraine were those he set out in a speech in June 2024, when he demanded Ukraine abandon its ambition of joining NATO and withdraw entirely from four regions Russia claims as its own territory.

Kyiv says it will not cede land that Moscow's forces have failed to capture in nearly four years of war.

A Ukrainian official said on Friday Ukraine had struck a Russian "shadow fleet" oil tanker in the Mediterranean Sea with aerial drones for the first time, reflecting the growing intensity of Kyiv's attacks on Russian oil shipping.

Putin says Ukrainian President Volodymyr Zelenskiy is an illegitimate leader. Zelenskiy's mandate expired last year but Ukraine, under martial law as it fights Russian forces, is constitutionally prevented from holding new elections.

If an election were held, Putin said, Russia would be ready to consider a halt to strikes deep inside Ukraine while people voted. He said 5-10 million Ukrainians living in Russia should be allowed to take part.

EU LOAN TO UKRAINE

Putin was speaking hours after European Union leaders set aside a plan to use frozen Russian assets as backing for a loan to Ukraine, deciding instead to borrow cash to help fund Kyiv's defence against Russia for the next two years.

The EU leaders said they reserved the right to use Russian assets to repay the loan if Moscow fails to pay war reparations to Ukraine.

Putin said the bloc had backed away from the original scheme because it would have faced serious repercussions, and it had damaged its status as a safe place to store assets.

"Theft is not the appropriate term... It's daylight robbery. Why can't this robbery be carried out? Because the consequences could be grave for the robbers," he said.

ON-SCREEN GLITCHES

The Kremlin said it had received over 2.6 million questions in advance for Putin's press conference. It styles the event as a demonstration of his openness to respond to questions on any topic.

The 73-year-old president, who is divorced, replied to one questioner in the affirmative when asked if he was in love, but did not elaborate. He told a boy he sometimes drives round Moscow incognito to understand what is happening in Russia.

Putin at one point gave the floor to Naran Ochir-Goryaev, a decorated Hero of Russia who described his part in Russia's storming of the Ukrainian town of Siversk.

Putin apologised to the widow of a soldier killed in action after she said her family had not yet received the compensation due to them. State media later reported she had been paid.

Ukraine says Russian gains are incremental and have come at the cost of huge casualties. It says it is fighting back in locations such as Kupiansk in the northeast, which Russia said it had captured last month.

Putin said a sharp slowing in the Russian economy - to 1% growth this year from 4.3% in 2024 - was the result of conscious actions by the central bank to bring down the rate of inflation.

While his press conference was under way, the bank announced it was cutting its key interest rate by half a percentage point to 16%.

Source: Reuters

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Adam

Economic

Drug pricing has emerged as one of the biggest issues for pharmaceutical companies this year, as the U.S. looks to dramatically reduce the costs paid by consumers.

As the largest single market for most pharma and biotech firms, higher drug prices in the U.S. — often nearly three times as costly as in other countries — are a key factor in the industry’s reliance on American sales, with branded drugs commanding even steeper premiums.

President Donald Trump has pushed for lower drug prices for Americans through so-called Most Favored Nations drug pricing, whereby the prices in the U.S. are set at the lowest price paid by other wealthy countries. That could have a tremendous impact on companies’ balance sheets.

But exactly how exposed are Europe’s biggest pharma companies to the U.S. market?

Majority U.S. sales

Among the 10 largest biopharmaceutical companies in the Stoxx 600 health index, five have a majority of their total sales from the U.S.: Roche , Novo Nordisk, GSK, Argenx, and UCB.

Europe's largest pharma companies are heavily exposed to the U.S. market

Argenx is the most exposed, with 85% of total sales originating in the U.S. in its last reported period.

The least exposed are Germany’s Merck KGaA and Bayer , with about 30% of sales coming from the U.S. Both Merck and Bayer have diversified businesses that go beyond pharmaceuticals while Roche also has a sizeable diagnostics division.

Meanwhile, AstraZeneca , the FTSE 100′s largest company, generates 42% of its sales from the U.S., and is aiming to boost this share as it targets $80 billion in revenue by 2030. In its third-quarter earnings report, the company, which has a broad portfolio of blockbuster drugs comprising cancer, respiratory, and diabetes medicines, said it is delivering on its strategy to strengthen operations in the U.S. to “power growth.”

The Cambridge, U.K.-based company has also pledged significant investments in the U.S., just like peers Novartis , Roche, and GSK, since Trump took up his second presidential term.

Making deals

Trump’s push for slashing drug prices has led many firms on both sides of the Atlantic to make deals with the administration.

In May this year, the president signed an executive order establishing MFN drug pricing. He has also sent letters to 17 major drugmakers, calling for them to slash U.S. prescription prices to levels paid overseas.

At the same time, Trump has made a push for onshoring production of various goods, including pharmaceuticals, and threatened triple-digit tariffs for drugmakers that fail to invest in U.S. manufacturing — further ramping up the pressure on companies to make deals with his administration.

AstraZeneca, Novo Nordisk, and other U.S. pharma giants have already made deals with Trump to lower prices of their medicines in the country, although analysts say it may not have a significant impact on their bottom lines due to the way the deals were structured.

″[AstraZeneca’s] MFN deal is more benign than appreciated, but EU countries may see access to drugs reduced,” said Jefferies analysts in November.

Late Wednesday, Bloomberg reported that heavyweights Roche and Novartis – the two biggest European pharma companies by market value – were closing in on drug pricing deals with the Trump administration, which may be announced as soon as Friday.

Both companies told CNBC they supported the administration’s goal of lowering drug costs for Americans but declined to confirm an imminent deal. Novartis said it was “in discussion with the Administration.”