The Democratic Republic of Congo, the world’s top cobalt producer, has extended its temporary export ban on cobalt for another three months. This ban is now effective until September 2025, following an initial four-month pause that began in February. The extension comes after cobalt prices plummeted to a nine-year low of about $10 per pound. As a result of this ban, cobalt prices have risen by 35%. The pause in exports is especially impacting companies like Glencore, and has led other regions, including Indonesia, to prepare for possible ongoing restrictions. These changes could alter market shares and affect global supply chains.

Market Supply Shift

The current scenario highlights a significant shift in market supply, driven mainly by policy changes in the Democratic Republic of Congo. With the cobalt export ban extended through the third quarter of next year, we are seeing changes in pricing. Initially, this was a reaction to long-term low prices, but it has evolved into a response that directly affects trading volumes and price volatility. Cobalt futures quickly reacted; the 35% price increase is not just recovery but also a re-evaluation of supply and future risks. Usually, slow physical market restrictions take time to reflect in derivatives, but that’s not happening here. Prolonged disruptions tend to alter assumptions about future pricing, and we are already seeing this recalibration, especially for the second half of 2025. These changes impact not just the current rates—there’s a growing sense of scarcity affecting shorter-term contracts. Market participants will have adjusted how they view the correlations between cobalt and related metals like nickel and lithium. Movements in those metals have been less drastic, suggesting that this reassessment is localized. However, there is potential for wider effects as substitution factors start to influence pricing models. The impact of reduced cobalt supply will also affect contract structures, particularly for instruments used for synthetic exposure by industrial hedgers.

Glencore And Indonesia

Looking at Glencore, the pause in Congolese exports has significantly reduced market flow. This creates an opportunity for smaller producers to fill the gap, although they may do so slowly. Since processing is concentrated in just a few areas, especially China, any drop in raw materials leads to delays that impact settled prices. We can no longer just depend on stated production capacity—timing is now more critical than volume. In Indonesia, we’ve noticed mining companies gearing up to increase output, likely in anticipation of future supply needs. If this trend continues, and if exports are made under competitive contracts, the differences in pricing between regions could tighten paper market spreads. Currently, these movements show less correlation, but they suggest a buffer capacity that we didn’t focus on earlier in the year. The tight supply situation should raise awareness about margin requirements, especially for short positions. Strategies that relied on earlier low prices now face risks from both price changes and access costs—financing availability and delivery obligations are now more sensitive to changes in contract pricing. We are increasing our near-term volatility estimates, especially around important inventory data releases and policy updates. Seasonal factors are less impactful now; policy and logistics play a much larger role. Create your live VT Markets account and start trading now.

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USD/CHF has dropped, trading around 0.8170 during Asian hours on Monday. The Swiss Franc gained support as safe-haven demand rose, driven by recent U.S. actions regarding Iran’s nuclear sites. U.S. President Trump confirmed attacks on Iran’s nuclear facilities in cooperation with Israel. As a result, tensions are likely to increase, with Iran vowing to defend itself. Switzerland’s trade surplus fell to CHF 2.0 billion in May, down from CHF 5.4 billion in April. This is the smallest surplus since December 2023, and key economic data will be released this week. In the U.S., Federal Reserve Governor Christopher Waller hinted at possible easing of monetary policy soon. However, Fed Chair Jerome Powell cautioned that this depends on improvements in labor and inflation data. The Swiss Franc (CHF) is one of the most traded currencies globally. Its value is influenced by market sentiment, economic conditions, and the Swiss National Bank’s actions. Switzerland’s stable economy and political neutrality make the CHF a favorite safe-haven asset. Its value is also impacted by the economic health of the Eurozone, closely related to the Euro. The Swiss National Bank reviews its monetary policy quarterly, aiming for inflation of less than 2%. Changes in economic growth or inflation can affect the CHF’s value. Given recent events, currency traders dealing with the USD/CHF pair should focus less on speculative sentiment and more on real changes in macroeconomic and geopolitical landscapes. The Franc’s early-week gain shows a direct market response to increased military tensions and defensive posturing from Iran. Rising geopolitical stress typically boosts demand for safe-haven currencies, including the CHF, especially during potential military conflicts. Switzerland’s political neutrality reinforces investor interest, leading to a swift influx into the Franc. The recent reduction in Switzerland’s trade surplus – from CHF 5.4 billion to CHF 2 billion – suggests a quicker-than-expected decline in export contributions. For traders, this is significant beyond just a statistic; it could indicate weakened external demand or higher import costs, slightly weakening the case for long CHF positions. Before this week’s data releases, any disappointing figures may have additional negative effects. Currently, market sentiment is more influenced by external events than by domestic data. Meanwhile, in the U.S., uncertainty remains. Waller’s suggestion of potential rate cuts has raised expectations of possible monetary easing, but there’s no clear timeline. Traders should be cautious about misinterpreting signals since Powell’s remarks tie any actions to upcoming labor and inflation data. Thus, monetary policy will depend on the outcomes, not a set schedule. Until there are notable improvements in U.S. employment and clear signs of decreasing inflation, the dollar is unlikely to weaken significantly. Temporary dips will likely result from external shocks, like these recent military strikes, rather than from dovish central bank policies. A full pivot from the Fed is not apparent yet, and traders should avoid jumping to conclusions too soon. The Swiss National Bank focuses on price stability with a ceiling of 2%. While they review their policies every quarter, they usually react decisively when their goals are threatened. Currently, with inflation within their target and no pressing concerns in GDP growth, there’s little need for a major change in approach. More likely, they will maintain a wait-and-see stance unless rising import costs or Eurozone instability demand intervention. It’s also important to recognize that the CHF often moves with the EUR due to the close relationship between the two regions. Should Eurozone data decline—whether in manufacturing PMIs or consumer confidence—it could negatively impact Swiss exports and the Franc’s value. We’re monitoring that situation closely for any warning signs. In terms of market positioning, significant military escalations should not be overlooked. The recent shift in USD/CHF shows how quickly market sentiment can change. However, if U.S. macro data remains strong, fluctuations in dollar strength could mitigate any reaction from geopolitical tensions. These two forces—regional stability and monetary clarity—will create pressures in both directions, requiring traders to be adaptable and strategic in the coming days.

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Fitch Ratings has noticed a significant rise in mortgage arrears in Australia during the first quarter of 2025. This spike is mainly due to ongoing cost-of-living pressures and high interest rates affecting household finances. Conforming mortgage arrears (loans overdue by 30 days or more) increased by 0.23% to 1.36%. Non-conforming arrears rose by 0.39% to 5.32%. This increase is nearly three times the usual seasonal rise of about 0.08% in the first quarter. The combination of high interest rates and continuing inflation has driven this increase. Although the RBA cut rates in February and May, the benefits of these cuts weren’t visible in the first quarter data. Housing prices also bounced back with a 0.9% increase after dropping in late 2024. Fitch expects prices to continue rising in 2025 due to limited housing supply, lower interest rates, and strong migration. To manage potential losses from mortgage defaults, Fitch Ratings has changed Australia’s outlook from stable to negative while keeping its current rating. This data clearly shows that mortgage arrears in Australia have risen substantially more than expected. Typically, we see a slight rise at the beginning of the year due to post-holiday spending pressures. However, this data indicates that these temporary issues have evolved into deeper financial challenges. Standard loan arrears have surged, which is unusual. Riskier loans are seeing even greater difficulties since their borrowers have less flexibility with high rates. When interest rates stay elevated, we can anticipate some problems. Coupled with persistent inflation, the strain is evident in this data. It’s important to note that these arrears increased even before recent rate cuts could impact them. While the rate reductions in February and May could provide some relief, the effects will take time to materialize. We likely won’t see significant changes until later this year, and financial stress continues to grow in the meantime. Housing prices are picking up again after a brief drop. Rising prices can help borrowers struggling to make repayments. A borrower with equity in their home is less likely to default if they can sell or refinance. However, timing is a challenge. The support from equity may not be quick enough for households falling behind. Also, since the price increase is partially due to limited supply rather than strong demand, it’s not a complete solution. The credit ratings landscape is responding. Moving from a stable to a negative outlook signals a warning. While the current rating remains the same, the underlying support is weakening. High arrears and sensitivity to interest rates cannot be overlooked. If conditions worsen, the calls for a reassessment will become louder. From our perspective, this has clear implications. Risk pricing must change to reflect delinquencies that are not just seasonal hiccups. Credit performance is shifting. If we continue to rely on last year’s models, we risk underestimating true exposure. We need to recognize that borrower stress is lasting longer than initially expected, especially in more vulnerable asset pools. Volatility linked to interest rate predictions will stay high as markets try to gauge when and how much monetary easing will happen. Even small cuts in policy rates may not immediately ease arrears. Borrowers adapt slowly, not instantaneously. Additionally, ongoing high costs for rent, utilities, and food are tightening the discretionary budgets that households rely on to stay current on payments. For mortgage-linked instruments, past performance is no longer a reliable guide. We need to prioritize forward-looking metrics, such as wage growth and unemployment expectations, particularly when making adjustments to manage risk. The same applies to interest rate curves that are flattening based on optimism that remains, for now, unproven. Moreover, short-term growth in housing prices might lead some models to underestimate the chance of defaults. A small increase in prices does not equate to strong consumer confidence, especially when driven by supply shortages and migration. These price hikes offer little comfort to borrowers still struggling to keep up with repayments. We should not assume that historical trends will repeat themselves perfectly. Risk buffers and stress tests need continual adjustment. We should expect volatility in arrears to persist through midyear until we see clearer signs of recovery in disposable income – which we have not seen yet. When making decisions based on assumptions about borrower behavior, it’s essential to be cautious. Models that fail to account for the transition from liquidity issues to actual loan deterioration risk missing crucial outcomes.

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NZD/USD starts the week with a slight downward trend after last week’s peak near 0.6100. During the Asian session, the pair hits a new monthly low around 0.5930, showing signs of downward pressure in a risk-averse market. Current events include the US and Israel’s military actions against Iran, specifically targeting its nuclear facilities. This rise in geopolitical tensions in the Middle East is increasing interest in safe-haven assets, benefiting the US Dollar (USD) while putting stress on the New Zealand Dollar, also known as the Kiwi.

US Fed Influence

The USD is also gaining strength from the Federal Reserve’s hawkish signals. They forecast fewer rate cuts in 2026 and 2027, while still expecting two cuts in 2025. Meanwhile, the Reserve Bank of New Zealand is likely to lower interest rates due to falling inflation and economic issues caused by US tariffs. From a technical perspective, if NZD/USD drops below the short-term trading range and the 0.6000 psychological level, it suggests a downward trend. This view is supported as the market waits for upcoming US PMIs to provide new direction. The recent downward pressure on NZD/USD indicates not only a change in overall sentiment but also a significant shift in risk due to the latest geopolitical events. With tensions in the Middle East rising after US actions targeting Iran, traders are moving their money into safer assets. The US Dollar, typically the go-to asset in uncertain times, has benefited from this trend. When risk appetite decreases, currencies linked to commodities or global growth expectations, like the New Zealand Dollar, generally decline. Additionally, expectations around US monetary policy are helping the Dollar. The Federal Reserve’s guidance suggests a waning chance of prolonged easing, leading to continued strength for the Dollar. Although there may still be a couple of rate cuts next year, longer-term signs indicate the Fed is not in a rush to ease their tightening stance. This perspective keeps rates relatively high, providing ongoing support for the Dollar.

RBNZ Perspective

On the other hand, the Reserve Bank of New Zealand (RBNZ) is on a different path. With inflation rates falling and new challenges from US trade policies, New Zealand may soon have to lower borrowing costs. The softening inflation could push policymakers to relax conditions, although this won’t happen immediately. This difference in direction is not favorable for the Kiwi. When we look at the charts, the importance of the 0.6000 level is clear. The recent breach below this threshold suggests a more sustained move downward. Hitting fresh monthly lows shows how shifted market sentiment has become. Support is not expected until closer to the 0.5900 area, where there’s historical buying interest. As for upcoming economic releases, Wednesday’s US PMI figures may create some volatility and lead to corrections if expectations aren’t met. Conversely, if the data remains strong and reaffirms a robust US economy, the Dollar could strengthen even more. Traders should keep an eye on supply chains and business orders, both of which indicate persistent inflation that the Fed will pay attention to. We anticipate continued high volatility. A tactical approach may be more effective in the near term, given the reliance on data for US monetary policy. It’s wise to set tighter stop-loss orders, especially below recent support levels, while monitoring short-term resistance near 0.5980 during any corrective rallies. In summary, without a significant easing of geopolitical risks or a major decline in upcoming US economic data, any rebound in the NZD/USD pair may be limited. Current positioning favors Dollar strength over Kiwi resilience in the immediate future. Create your live VT Markets account and start trading now.

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Rising Tensions and Market Dynamics

The US has launched airstrikes on Iranian nuclear sites, escalating geopolitical tensions. President Trump announced that Iran’s facilities were “obliterated” and warned of more action unless Iran seeks peace. In response, Iran has pledged to retaliate, driving up demand for safe-haven assets. In the UK, retail sales fell by 2.7% in May, reversing a previous increase and putting pressure on the Pound. The Bank of England kept interest rates unchanged at 4.25%, with possible cuts in future meetings due to uncertain economic forecasts. The Pound Sterling is affected by the Bank of England’s policies and economic data. The Trade Balance is another factor that impacts the Sterling by influencing currency strength based on export and import differences. As GBP/USD trades lower around 1.3405 in early Monday sessions, new patterns are emerging that warrant attention. Increased demand for the Dollar, driven by geopolitical risks from US military actions against Iran, has led to higher volatility. This situation often pressures GBP-based pairs during uncertain times.

Impact of Geopolitical and Economic Factors

The recent airstrikes have prompted Washington to intensify its warnings of further military options, while Tehran has vowed to respond. Consequently, markets are pricing in greater instability, which historically benefits the Dollar in times of tension. Although the current pricing of Cable reflects this, there are deeper issues at play. In the UK, the economy experienced a significant drop in consumer spending last month. Retail sales plunged by 2.7% in May, marking a major reversal from previous resilience. This decline puts additional pressure on growth forecasts and complicates future monetary decisions. The Bank of England decided to keep interest rates steady at 4.25% in its latest meeting. However, with slowing growth data and flattening inflation, speculation about a rate cut before summer’s end is growing. Markets have taken notice, with short-term interest rate futures adjusting prices, impacting institutional demand for the Pound in yield-seeking contexts. Later today, the purchasing managers’ index (PMI) reports will be closely monitored by institutional investors. PMI data for both manufacturing and services, covering the UK and the US, can significantly shift market sentiment if they differ from expectations, especially with current tight trading ranges. The market’s reaction will likely set the tone for the week. Moreover, Britain’s trade data remains crucial. A widening trade deficit, whether due to increased imports or declining exports, puts added pressure on the domestic currency. In light of disappointing retail figures, weak trade performance further paints a fragile economic picture that many did not anticipate weeks ago. All this underscores the focus on interest rate direction. If US indicators show continued strength and the Federal Reserve maintains a relatively hawkish stance, the differences in monetary policies between the US and UK will be hard to overlook. In this environment of short-term volatility and data releases, it’s vital to reassess risks and fine-tune exposure. Movements in GBP/USD are now more closely linked to macroeconomic updates than to technical factors. Timing market entries based on high-probability outcomes may yield better results than relying solely on static price levels. This week is expected to remain volatile. Keeping an eye on data releases and geopolitical events is crucial, especially during US afternoon sessions when Dollar trading volumes increase. Currently, the directional trend favors the Dollar, but its persistence will depend more on the length of this wave of risk aversion than on previous price levels. Create your live VT Markets account and start trading now.

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Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

On Monday, the People’s Bank of China (PBOC) announced the USD/CNY central rate at 7.1710, up from the previous rate of 7.1695. This is lower than the Reuters estimate of 7.1914. The People’s Bank of China aims to maintain stable prices and exchange rates while fostering economic growth. It also focuses on financial reforms to enhance its financial market.

Influence of the Chinese Communist Party

The PBOC is owned by the People’s Republic of China and is affected by the Chinese Communist Party. The current governor, Mr. Pan Gongsheng, also serves as the Secretary of the CCP Committee. The PBOC uses various monetary policy tools, including the Reverse Repo Rate, Medium-term Lending Facility, and Reserve Requirement Ratio. The Loan Prime Rate is crucial in shaping loan and mortgage rates, as well as the Chinese Renminbi’s exchange rates. China’s financial sector has 19 private banks, with WeBank and MYbank as notable digital lenders. In 2014, China allowed privately funded banks to operate, diversifying its state-dominated financial sector. The PBOC’s setting of the USD/CNY central rate at 7.1710 suggests a careful intervention. Although slightly higher than the previous rate, it’s well below the market expectation of 7.1914. This indicates a subtle effort to counteract depreciation pressures on the Renminbi while managing volatility. A rate below expectations usually signals that policymakers are wary of the yuan weakening too much, especially given the fragile consumer confidence and low export activity. The central bank’s decision shows a desire for stability. Instead of allowing the currency to drop further, they chose a more stable reference point. This can indicate a reluctance to let capital outflow concerns grow or to cause speculative issues. The central rate serves as a guiding tool. When markets receive a lower value than expected, it suggests a careful strategic approach. Gongsheng plays a key role in both policy implementation and party alignment, linking political goals with economic tools. Monetary decisions are generally influenced by domestic targets like GDP and employment, as well as managing systemic risks. The use of policy instruments like the Medium-term Lending Facility and Reverse Repo supports this approach.

Adjustments and Financial Sector Dynamics

Recent cautious liquidity adjustments indicate that while easing may happen, it’s done with consideration of currency pressures. Although there’s ongoing talk of broad stimulus, the actions taken appear targeted, aiming to boost areas like infrastructure lending or support for small and medium-sized enterprises (SMEs) without causing broad inflation. This is evident in the stable Loan Prime Rate, which helps guide borrowing costs for households and businesses downwards. China’s financing model has evolved over time. The emergence of banks like WeBank and MYbank, along with the introduction of privately funded institutions since 2014, shows a willingness for reform. However, these new players still play a peripheral role, with state-linked lenders and policy intermediaries remaining dominant. In this context, any shifts in liquidity or capital flows need careful monitoring. While tools like the Reserve Requirement Ratio could change if growth declines sharply, current strategies focus on measured adjustments. This includes managing expectations regarding exchange rate flexibility, which is vital for exports and offshore derivatives. Practically, this means we should expect currency guidance to be used more openly, especially if foreign exchange reserves decline or trade data falls short of expectations. The Renminbi will likely be kept within specific limits rather than allowing quick, sentiment-driven changes. In the short term, anything related to USD/CNY fluctuations or offshore Renminbi instruments should be approached with caution, as Beijing isn’t ready for sharp disruptions. They appear focused on managing volatility rather than letting the market dictate outcomes. Thus, forward pricing or hedging strategies should account for tighter currency controls rather than unexpected shifts. We should also be alert to where foreign exchange pressures might arise if global sentiment on emerging markets changes. Monitoring signals from official sources and market indicators — especially swap rates and repo spreads — will help us understand how tightly liquidity is being controlled underneath the surface. Create your live VT Markets account and start trading now.

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The price of West Texas Intermediate (WTI) oil went up over 2%, reaching about $75.50 per barrel. This increase is due to U.S. military strikes on three Iranian nuclear facilities, raising concerns about oil supply. U.S. President Donald Trump mentioned that the strikes hit Fordow, Natanz, and Isfahan, coordinated with an Israeli operation. Tensions with Iran could escalate further, as Tehran has promised to retaliate.

Impact Of Potential Closure Of Strait Of Hormuz

Traders expect oil prices to rise even more because of fears that Iran might close the Strait of Hormuz, a crucial route for about 20% of the world’s crude oil supply. Even though there are alternative pipeline routes, a significant amount of oil may remain unexported if access to the strait is blocked. WTI Oil is produced in the U.S. and transported through the Cushing hub. It serves as an important benchmark in the oil market. Prices for WTI Oil can change based on supply and demand, political situations, and global economic factors. Weekly oil inventory reports from the API and EIA also influence prices by showing supply and demand changes. OPEC’s decisions, which involve major oil-producing countries, play a critical role in determining WTI Oil prices. The recent increase in WTI crude oil, which rose over 2% and settled around $75.50 per barrel, is linked to heightened tensions in the Middle East. This tension stems from U.S. and Israeli military actions targeting Iranian nuclear sites in Isfahan, Natanz, and Fordow. President Trump confirmed the strikes, describing them as a strategic response, which raised urgent concerns about oil supply. Iran’s strong condemnation of the attacks and its threat of retaliation poses a real danger to maritime logistics in the region, especially concerning the Strait of Hormuz. This narrow route is essential for transporting nearly one-fifth of the world’s crude oil. Although there are alternative pipeline options, they cannot fully compensate for a potential closure of this key maritime route. Consequently, the oil market is adjusting to this supply chain risk.

Geopolitical Influence On Oil Pricing

We’ve seen this happen before—the markets react quickly when geopolitical events occur in key energy areas. As we move forward, contract holders should watch for changes in oil pricing, specifically looking for signs of increased short supply. If this trend continues over the next week, those positioned for tight supply could benefit. One aspect often overlooked during geopolitical events is how supply chains respond. Even without extended disruptions, market sentiment tends to stay high until political stability returns. This sentiment impacts refining margins and transportation costs, influencing how traders develop strategies around fuel derivatives and energy-related indices. Weekly inventory data from the API and EIA can provide temporary insights into domestic supply, but they likely won’t overshadow the broader geopolitical factors at play. For instance, last week’s unexpected drop in commercial stocks was largely ignored as traders focused more on long-term risks rather than short-term supply adjustments. Regarding policy, OPEC’s decisions will be under close observation. Their production quotas, especially from Gulf countries, may be revised if regional shipping faces new challenges or insurance costs rise. They might be willing to help address global supply imbalances, though any changes could lag behind spot market shifts. Since WTI is settled at the Cushing delivery point, it’s also important to consider how much crude from the Gulf Coast is redirected inland. This could widen the Brent-WTI spread again, creating opportunities for arbitrage or different hedging strategies. Pay attention to any significant build-up in Gulf inventories, which may ultimately affect price differentials. As traders adjust their positions using options and swaps, we see that volatility pricing is already indicating higher uncertainty in the future. Traders are reevaluating costs for near-date crude options, which are seeing price increases. There’s also a rise in AI-generated alerts for refining operations as companies respond to this price spike. In addition to traditional supply-demand analytics, keep an eye on freight rates, insurance costs, and geopolitical risk indices—data increasingly integrated into quantitative models. These factors can influence trading positions on ICE and CME-linked energy contracts and impact overall market liquidity. Create your live VT Markets account and start trading now.

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Healthcare shares are typically viewed as a defensive stronghold in turbulent times. Yet, the past year defied this expectation. The sector tumbled 29%, making it the worst performer across all S&P 500 categories. This surprising downturn has prompted traders to ask: What exactly went wrong, and could this pullback present an opportunity?

In general, healthcare firms fare well even during economic slowdowns. People continue to require medications, medical equipment, and hospital care regardless of economic conditions. With an ageing global population and rising incidences of chronic illnesses, demand for healthcare remains structurally strong.

However, despite these favourable long-term trends, the healthcare sector came under pressure over the past 12 months.

A primary driver of the decline was surging costs, particularly for large firms like UnitedHealth Group (UNH). Post-pandemic, more patients, especially older individuals, sought medical services than expected. This led to a rise in medical expenditure, compressing profit margins. Concerns deepened when UnitedHealth’s CEO stepped down, followed by the company cutting its earnings outlook for the year.

Even so, UnitedHealth continues to post solid top-line growth. Revenues climbed beyond $400 billion in 2023, although elevated costs have weighed on profits. Looking ahead, the firm aims to recalibrate premium pricing and rein in expenses to restore earnings momentum.

Its financial fundamentals remain robust. UnitedHealth benefits from strong cash flow to support dividends and operations. That said, traders should monitor its increasing debt load, which reached $76.9 billion, well above levels seen ten years ago. While debt-funded expansion may be strategically sound, prudent debt management remains essential.

For traders, UnitedHealth shares currently appear undervalued. With an intrinsic value estimated around $570 per share, its forward price-to-earnings ratio of 13.2 looks appealing. If cost controls succeed, its stock could rebound once temporary pressures abate.

Meanwhile, Novo Nordisk presents a contrasting picture. The Danish pharmaceutical powerhouse recorded strong revenue gains, primarily driven by its high-demand diabetes and weight-loss treatments. Profit margins stood at a remarkable 48%, outpacing many healthcare peers.

Novo Nordisk reclaims its position as Europe’s most valuable public company, overtaking software developer SAP https://t.co/jny5wYqIci

— Bloomberg (@business) June 13, 2025

Nonetheless, Novo Nordisk faces risks stemming from lofty market expectations and reliance on regulatory approval of new drugs. Rising competition, particularly from Eli Lilly, could also challenge its future dominance.

In 2023, Novo increased its debt to over $14 billion after acquiring three Catalent manufacturing sites. While the move enhances production capabilities, it also introduces financial risks. However, Novo’s cash flow remains sufficiently strong to fund dividends and strategic investments.

Importantly, the company’s Return on Invested Capital (ROIC) consistently exceeds its cost of capital, an indicator of sound management. Analysts place its intrinsic share value at approximately $150, well above its current trading price of $80. Despite a higher forward P/E of 19.5, the valuation is justified given Novo’s superior growth outlook.

Given today’s macro backdrop, healthcare stocks could start drawing fresh attention. Ongoing trade tensions, persistent inflation, and waning global growth may remind investors of healthcare’s defensive appeal.

While the sector has recently faltered, underlying demand remains intact. For some traders, the current weakness could represent a prudent re-entry point.

Nonetheless, investors should remain vigilant to firm-specific risks, such as UnitedHealth’s mounting debt and Novo Nordisk’s regulatory exposure. Still, with attractive valuations and strong fundamentals, healthcare may gradually regain favour over the coming months.

Market Movements This Week

The US Dollar Index (USDX) recently rebounded from the 98.20 region but struggled to attract committed buyers. If this hesitation continues, the index could soften before attempting another move higher. Watch closely for potential support near 97.70. Should strength return, the next resistance lies around the 99.00 level.

EURUSD has broken above 1.15297, signalling possible upside momentum. However, resistance near 1.1550 may cap further gains. If prices retreat, keep a close eye on support around 1.1420.

GBPUSD encountered firm resistance near the 1.3510 zone. Traders should closely monitor for bearish signals around 1.3485, particularly if the market consolidates at current levels. In the event of further upward pressure, 1.3560 would become another critical resistance area. Conversely, downside movements will test supports around 1.3360 and possibly 1.3315.

USDJPY continues to move higher after pausing near resistance around 145.75. Potential bearish pressure may re-emerge around the 146.55 area, an important zone to monitor in upcoming sessions.

USDCHF currently sees limited selling activity around 0.8220. Prices could edge higher, targeting the 0.8200 level, but any new upward swing would likely invite fresh bearish activity at the 0.8220 level once again.

AUDUSD faces stiff resistance at the closely monitored 0.6500 zone. A critical test will be the upcoming encounter with its underlying trendline. Traders should be ready for decisive price action once this occurs.

NZDUSD has recently declined from the 0.6025 resistance area. Further downside pressure could test levels around 0.5940 or even down to 0.5900, presenting critical zones to watch for potential reactions.

For USDCAD, the 1.3715 area provided only minor resistance, suggesting upward momentum remains possible. Traders should carefully observe price actions approaching the next critical zone at 1.3795.

Turning to commodities, US crude oil remains volatile amid escalating geopolitical tension between the US and Iran. The next resistance to watch lies around the 83.90 mark.

Gold has stabilised at support near 3330, and upward momentum could see a test of resistance at 3410.

As for indices, the S&P 500 remains under pressure in light of geopolitical unrest. Key support to watch is the 5810 area.

In cryptocurrency markets, Bitcoin (BTC) declined sharply from the 106825 area, subsequently breaking below the 103358 support. The ongoing geopolitical tensions involving the US and Iran could intensify pressure on Bitcoin. If the critical low at 100396 breaks, traders should anticipate deeper consolidation or further downward moves.

Finally, Natural Gas prices sharply retreated after nearing the resistance at 4.06. Further consolidation at current levels could push prices toward a lower critical support zone at 3.57. Traders should watch for clear signals at this level for directional guidance.

Key Events This Week

On Monday, 23 June, attention turns to the Eurozone. Germany’s Flash Manufacturing PMI is forecast to edge up to 48.9 from 48.3, while Services PMI is projected to rise to 47.8 from 47.1. This slight improvement could offer the euro some support to start the week.

In the UK, expectations are for a small increase in Flash Manufacturing PMI to 46.9 (from 46.4), and Services PMI to tick up to 51.2 from 50.9. Better-than-expected readings may offer sterling a modest lift early in the week.

In the US, PMI data suggests a slightly softer outlook. Flash Manufacturing PMI is expected to fall to 51.1 (from 52.0), and Services PMI to 52.9 (from 53.7), potentially exerting downward pressure on the US dollar index.

On Tuesday, 24 June, Canada’s CPI (m/m) is forecast to rise by 0.5%, reversing last month’s -0.1%. This could initially push USDCAD higher, though a retracement may follow soon after.

Come Wednesday, 25 June, Australia will release its annual CPI figure, expected to remain steady at 2.4%. Traders should pay attention to the prevailing price structure around this event.

By Thursday, June 26, the US Final GDP quarterly data will be reported, holding steady expectations at -0.2%. This unchanged forecast prompts traders to focus closely on market structure and price patterns rather than expecting major volatility from this data alone.

Lastly, Friday, June 27, brings the US Core PCE Price Index monthly figures, expected unchanged at 0.1%. Like previous events, market participants should reference existing technical structures and cautiously gauge market reactions accordingly.

Overall, these economic updates provide crucial insights, helping traders navigate currency and equity markets with informed caution this week.

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The People’s Bank of China (PBOC) is in charge of setting the daily midpoint for the yuan, or renminbi (RMB). It uses a managed floating exchange rate system that allows the yuan to fluctuate within a range of +/- 2% around a central reference rate. Recently, the yuan closed at 7.1820. To manage liquidity, the PBOC added 220.5 billion yuan through 7-day reverse repos with an interest rate of 1.40%. Since 242 billion yuan is maturing today, the net effect is a decrease of 21.5 billion yuan from the system. This action shows the PBOC’s continued efforts to control and stabilize the currency market. This update highlights the PBOC’s current monetary actions, which aim to adjust liquidity in short-term lending while guiding the yuan’s value. Each day, when the People’s Bank sets its reference rate, it acts as a daily benchmark, helping keep market fluctuations in check. Although the exchange rate system appears market-driven, it is closely managed within narrow limits. A key point in this report is the reduction of overall liquidity through short-term reverse repos. The net withdrawal of 21.5 billion yuan, while not large, indicates a tighter control on cash markets. This deliberate move suggests that the PBOC wants to prevent excessive easy money from flowing freely, which could help slow down any depreciation of the renminbi. Zhou and the PBOC team clearly aim to keep the currency stable without causing market disruptions. Rapidly weakening the yuan could lead to unwanted capital outflows and complicate inflation management. However, keeping it too strong might hurt exporters already facing weak global demand. The PBOC is carefully steering the situation in a measured way. For those looking at market speculation, it’s important to consider the effects of tighter repo flows and the meaning behind short-term interest rate choices. A 1.40% return on 7-day repos may not seem significant on its own, but the direction is more important than the amount. If liquidity is tightening slightly, it could influence expectations around interest rate differences. Future actions should be viewed in light of these changes. Anything sensitive to exchange rate fluctuations or short-term funding conditions needs close attention. If Beijing decides to tighten liquidity or change policy guidance, it will likely impact options pricing. Traders should be careful not to assume straightforward shifts—especially with this central bank, it’s better to anticipate adjustments rather than bet on extremes. Timing is crucial; carry costs and forward pricing will adjust before spot rates shift from current levels.

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