The United Kingdom has just negotiated and signed a detailed pharmaceutical anti-crime/trade agreement. Consequently, it will dramatically raise the prices it pays for new drugs from the US—up to 25% more. The deal marks the beginning of big changes to how the UK values drugs. These reforms will soon be visible at the National Institute for Health and Care Excellence (NICE). The Federal Reserve is penciling in at least one more rate cut—most likely December. This makes for a complicated economic landscape for each country.
Additionally, the ISM manufacturing index in the US fell to 48.2 in November. This decrease is bad news, confirming further contraction in the manufacturing sector. The economic picture is shifting at an incredible pace. Analysts are even predicting an 86% chance that the Federal Reserve will cut rates by at least 25 basis points at its next meeting. This long-awaited reduction in rates would be a major boon to international trade. It would particularly alter the state of play between the US and the UK.
Changes in Pharmaceutical Pricing
A new US zero-tariff pharmaceutical agreement has been signed. This deal provides for UK-produced medicines and medical technology an exemption from tariffs. This deal results in the biggest price increase to date on new drugs coming to market in the US. Without the continuation, prices will increase 25%. This increase causes serious accessibility and affordability issues for UK patients.
This marked a major REESE win as NICE continues the revision of its drug valuation framework to acknowledge these new pricing realities. State and other stakeholders are very eager to see how this updated regulation will play out during negotiations and affect access to these critical medicines. As the price of care continues to increase, patients and healthcare professionals will have to learn to adapt to this new environment together.
Economic Indicators and Market Reactions
The economic signals from the US aren’t all that positive, with the manufacturing sector continuing to contract. This trend is perhaps most clearly illustrated by the recent ISM manufacturing index plunge. By contrast, Norway’s manufacturing PMI increased from 48.2 to 53.0, indicating strong growth in this area. At the same time, Sweden’s manufacturing PMI dropped to 54.6, indicating a mixed performance among the Nordic countries.
If the Federal Reserve follows through on an expected rate cut, it could be the trigger for a US economic turnaround. As investors digested these developments, the yield on 10-year Treasuries jumped nearly 10 basis points. Additionally, the 10-year swap rate climbed by approximately 7 basis points throughout the day, illustrating market adjustments in response to economic forecasts.
Global Market Trends
European natural gas prices have tanked lately. It is an important milestone this decline represents, taking prices to their lowest since early 2024. The spread between European and US natural gas prices has widened considerably. This adjustment represents the most stringent level since 2021 and reflects a regional realignment of energy policy.
Increasing appetite for risk was reflected in foreign exchange markets where the EUR/USD exchanged upward through the session, settling above 1.16. This increase reflects investor confidence in the economy’s recovery and return to normal. Fourth, it foreshadows upcoming loosening in monetary policy from central banks in Europe and the US.
On Monday, Bitcoin experienced its worst single-day loss, down 5.2%. This decline compounds its total drop of 30% since peaking in October. This downturn reinforces the current volatility within digital asset markets and the wider impact macroeconomic trends have on investor behavior.