• A weaker-than-expected June jobs report could renew debate at the U.S. Federal Reserve (Fed) over how to assess the labour market at a time when the number of people available to work may also be declining due to an ageing population and tighter immigration policies.
• U.S. employers added 57,000 jobs in June, while job gains for April and May were revised down by a combined 74,000. Although the unemployment rate edged down to 4.2% from 4.3%, the decline was largely driven by 213,000 fewer people reporting themselves as unemployed, not stronger hiring. Instead, the number of people reporting they had jobs fell by around half a million, as many left the labour force altogether.
• The labour force decreased by about 700,000 in June and has declined by about 1.3 million since President Donald Trump returned to office. Around 1.5 million fewer people were employed in June than in January 2025, raising concerns that a shrinking workforce could weigh on future economic growth despite productivity gains.
• The weaker labour market data comes as the Fed continues to balance persistent inflation against the risk of slower growth. According to San Francisco Fed President Mary Daly, uncertainty over whether inflation or weaker growth poses the greater risk supports waiting before making further interest rate decisions. Following the report, financial markets pared expectations for additional Fed rate hikes.
• If history proves an accurate guide, June's weaker-than-expected first look ​could well be revised sharply lower in the reports for July and August. Policymakers are also assessing whether stronger productivity growth, supported by artificial intelligence, can offset a shrinking workforce and flat hours worked.

(Source: Reuters)

• Canada's manufacturing sector expanded further in June as production and employment increased, but not all was positive for the sector as intensifying supply shortages helped lift cost inflation to a near four-year high.
• The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) edged up to 53.0 in June from 52.9 in May, marking the sixth consecutive month that the index remained at or above the 50-point threshold, signalling continued expansion in manufacturing activity.
• According to S&P Global Market Intelligence, Canada's manufacturing economy on the surface enjoyed a positive June with solid gains in output and new business supporting a third consecutive month of employment growth. However, manufacturers also reported a decline in export sales as global demand remained uneven.
• Growth continued to be supported by stockpiling activity, as firms and their customers sought to build inventories amid substantial supply-side disruption. Suppliers' delivery times lengthened to the greatest extent since September 2022, reflecting shipping delays linked to the Middle East conflict.
• High oil prices, rising transportation costs and U.S. tariffs continued to push up costs. The input price index rose to 67.2 from 66.5 in May, its highest reading since July 2022, while manufacturers also increased selling prices to help offset higher operating costs.
• Despite stronger production and hiring, business confidence slipped to a three-month low, as firms remained concerned that elevated input costs, supply shortages and trade-related uncertainty would continue to weigh on growth over the coming months.

(Source: Reuters)

• Corporate developments dominated the Jamaica Stock Exchange (JSE) during the period, with a combination of regulatory actions, reporting delays and sweeping C-suite transitions shaping the corporate news flow.
• Regulatory compliance took centre stage as the JSE immediately suspended trading in the shares of Kintyre Holdings (KNTYR) and Atlantic Hardware & Plumbing (AHPC), given their audited financials being 91 days overdue. In contrast, Blue Power Group is proactively managing a comparatively minor reporting delay of its own aiming to publish its audited financial statements by July 13. The company attributed the late submission to delays in receiving the audited financials of an associated company.
• Elsewhere, Derrimon Trading Company (DTL) advised investors that publication of its FY2025 Annual Report has been deferred to late September, extending its corporate reporting timetable.
• Alongside these disclosure developments, several listed companies announced leadership changes. At CAC 2000, Executive Chairman Steven Marston has assumed the additional role of Chief Executive Officer following the departure of Gia Abraham. The wave of executive changes extended across the market, with A.S. Bryden appointing Shelley Sylvester as Group Chief Financial Officer, WIPT announcing the departure of Senior Vice President Danville Walker, and Caribbean Assurance Brokers strengthening its board with the appointment of Noel Williams as a director.
• Collectively, these developments underscore the continued importance of strong corporate governance, timely financial disclosure and the smooth execution of leadership transitions, all of which could influence market sentiment and confidence in the affected companies.

(Sources: JSE & NCBCM Research)

• The Dominican Republic has become the first country in Latin America and the Caribbean to integrate parametric insurance into its adaptive social protection system. Developed through the Tripartite Agreement between the United Nations Development Programme (UNDP), the Insurance Development Forum (IDF), and Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) through the InsuResilience Solutions Fund (ISF), the initiative will initially protect 3,030 climate-vulnerable households enrolled in a conditional cash transfer programme.
• The insurance product uses a parametric mechanism that automatically triggers payouts when predefined thresholds for excessive rainfall or strong winds are reached, using independently verified satellite and meteorological data.
• The new insurance policy, activated on June 15th, provides an additional layer of protection for households most exposed to climate-related events. The objective is not simply to compensate losses after a disaster but to ensure that financial assistance reaches affected families quickly, allowing them to cope with shocks before they escalate into long-term crises.
• By strengthening the government’s ability to respond rapidly, the programme transforms public support into timely and tangible assistance for communities facing extreme weather events. This approach reflects a growing recognition that climate resilience depends as much on speed and preparedness as on recovery.
• For AXA Climate, a member of the consortium that designed the solution, this milestone demonstrates how insurance can move beyond traditional compensation mechanisms to become a proactive tool for social resilience. By embedding risk financing directly into social protection systems, governments can deliver faster and more predictable support to vulnerable populations exposed to growing climate risks.
• Beyond its immediate impact, the initiative offers a potentially scalable model for other countries seeking to strengthen climate resilience. As climate-related disasters become more frequent and severe, governments are increasingly exploring ways to build anticipatory systems that protect people before vulnerabilities turn into humanitarian or economic crises.
• Consequently, this initiative demonstrates how insurance can strengthen preparedness, support fiscal resilience and accelerate recovery. More importantly, it shows that climate resilience is not only about rebuilding after a disaster, but it is also about ensuring that people have the tools and support they need before disaster strikes.

(Source: Climate.AXA)

• On Friday, June 26, the Banco Central de Bolivia (BCB) announced that it was transitioning away from its 15-year-long currency peg towards a more liberalised foreign exchange (FX) rate framework. The BCB approved new FX regulations that will determine the exchange rate based on daily transactions carried out by financial institutions, with the new rate published by 8 p.m. local time each day and effective the following day.
• While the new framework liberalises the FX and allows for market forces to play a greater role, it should be considered more as a managed float system rather than a fully free-floating system. The new rules state that financial entities cannot charge more than 10 Bolivian cents above the daily official exchange rate when selling dollars. The volume-weighted average exchange rate for June 29, 2026 – the first day the new framework was in effect – sat at Bob9.76/USD.
• Reform to the exchange rate policy was a key commitment that President Rodrigo Paz had campaigned on, as the antiquated framework was increasingly distortionary and unsustainable, as evidenced by the emergence of a large parallel market.
• Paz has made incremental progress in moving away from this system since coming to office in November 2025. On December 1, 2025, the BCB started officially publishing the prevailing, black market exchange rate charged by financial intermediaries as the ‘referential value’, which presented a shift from the previous government that did not even acknowledge the prevalence of a parallel rate.
• The overvalued FX peg of Bob6.96/USD posed several macroeconomic challenges, primarily for external account stability, as it was not only hurting export competitiveness but also contributed to the depletion of the BCB’s international reserves as it sold hard currency to defend the peg, which ultimately led to import compression flows given a lack of USD liquidity.
• Trinidad and Tobago (T&T) offers a contrasting example of the challenges associated with maintaining a heavily managed exchange rate regime. The country has retained its de facto peg to the US dollar at around TTD6.77/USD despite persistent foreign exchange shortages, an overvalued currency, and repeated calls for greater exchange rate flexibility. The Central Bank of Trinidad and Tobago (CBTT) has instead relied on sizeable FX interventions to defend the currency, contributing to chronic shortages of US dollars and the emergence of allocation constraints across the economy.
• Rather than adjusting the exchange rate, policymakers have prioritised administrative and monetary measures to address FX pressures. Newly appointed CBTT Governor Larry Howai has indicated that higher interest rates^[1], tighter FX management, credit controls, and measures to encourage foreign exchange generation will be used to ease shortages, while stressing that any change to the exchange rate regime remains a political decision.
• This highlights the trade-offs of maintaining an overvalued peg, with T&T opting to preserve exchange rate stability despite the growing distortions in the FX market and the challenges the FX shortage is posing to businesses, consumers and the overall smooth functioning of the economy, in contrast to Bolivia's recent move towards a managed float.

________________________

¹The CBTT has held rates even since this announcement in late 2025

(Sources: BMI, A Fitch Solutions Company & NCBCM Research)

• The Trump administration on Wednesday, July 1, 2026, declined to renew the U.S.-Mexico-Canada Agreement (USMCA) in its current form. The decision starts a decade-long clock to wind down the trade deal as the U.S. seeks changes ‌to reshore manufacturing jobs and reduce U.S. trade deficits with Mexico and Canada.
• Following the agreement's six-year review, the USMCA will remain in force for another 10 years, with annual reviews before it expires, unless the three countries agree to renew it with changes. According to U.S. Trade Representative Jamieson Greer, the United States will continue to engage with Mexico and Canada to address the agreement's shortcomings and bilateral trade deficits.
• The U.S. will proceed with a bilateral negotiating round with Mexico during the week of July 20, focusing on strengthening North American rules of origin for automobiles and other industrial goods, as well as enhancing economic security to prevent other countries from benefiting from USMCA access.
• Mexican Economy Minister Marcelo Ebrard noted that Mexico would participate in the annual reviews while working to resolve outstanding disputes. Canada also advised that it would continue discussions on President Trump's tariffs on steel, aluminium, automobiles and lumber to support North American prosperity and competitiveness.
• The decision was widely expected, as the Trump administration has argued that more time is needed to address persistent U.S. trade deficits. President Donald Trump has also pushed for North American-built vehicles to contain 50% U.S. content, increasing the regional requirement to 82%.
• The decision to shift to annual reviews raises the prospect of uncertainty for businesses that rely on the USMCA and could limit investment across North America. The deal currently governs about US$2Tn annually in goods and services between the three countries

(Sources: Reuters & The Guardian)

• U.S. manufacturing activity slowed in June after reaching a four-year high in May, as some of the boost from businesses front-loading orders to avoid shortages and higher prices caused by the Middle East conflict began to fade. The Institute for Supply Management (ISM) Manufacturing PMI eased to 53.3 from 54.0, but remained above the 50-point threshold, indicating continued expansion.
• Despite the moderation, manufacturing remained supported by the artificial intelligence (AI) investment boom, with the sector expanding for a sixth consecutive month. Fourteen industries reported growth, including electrical equipment, machinery, primary metals, and computer and electronic products.
• According to the ISM, new orders slowed only marginally, while factory inventories rebounded after a prolonged period of contraction. Supply chains also improved somewhat following the U.S.-Iran ceasefire, with supplier delivery times easing from May levels.
• Manufacturers continued to report elevated input costs, although the pace of price increases moderated as lower energy prices reduced some raw material costs.  The ISM's prices paid index fell to 73.0 from 82.1, while shortages persisted for products such as semiconductors, electronic components and memory chips.
• References to the Iran war and pricing volatility declined compared with May, although respondents said the conflict, tariff uncertainty and concerns over the reopening of the Strait of Hormuz continued to weigh on costs and business planning. Manufacturers of food, beverage and tobacco products said input costs remained elevated, while transportation equipment producers warned tariffs continued to pressure profitability and demand.
• Factory employment remained subdued, but hiring intentions improved. About 64% of respondents reported they were hiring, up from 50% in May, while economists expect the June employment report to show 110,000 jobs added and the unemployment rate remaining at 4.3%.
• While U.S. manufacturing is still expanding, the momentum is cooling as conflict-related front-loading fades. At the same time, elevated input prices, tariff uncertainty, and shortages in semiconductors and electronic components could keep cost pressures high, reinforcing the Fed’s cautious stance on inflation.

(Source: Reuters)

• The impact of Hurricane Melissa continued to weigh on Jamaica's economy in the first quarter of 2026. According to the Statistical Institute of Jamaica (STATIN), real GDP (2015 constant prices) contracted by 4.1% year-over-year, below the 5.9% decline projected by the Planning Institute of Jamaica (PIOJ). The downturn reflected contractions in both the Goods-Producing Industries (-7.3%) and the Services Industries (-3.0%).
• Within the Goods-Producing sector, structural damage and operational disruptions led to contractions in three out of four industries. Agriculture, Forestry & Fishing (-18.3%) recorded the largest decline due to extensive hurricane damage to crops and livestock, with sharp reductions in fruit, other crop, and yam production. Banana and plantain output fell by 86.0% and 83.7%, respectively.
• Meanwhile, Manufacturing (+0.6%) was the only Goods-Producing industry to expand, driven by increased cement production to meet strong demand from hurricane recovery and reconstruction activities.
• Similarly, most Services industries contracted, led by Accommodation & Food Service Activities (-16.6%), Electricity, Water Supply & Waste Management (-10.2%), and Transport & Storage (-5.5%), reflecting hurricane-related disruptions, lower tourist arrivals, and reduced utility consumption. Financial & Insurance Activities (+2.9%) was the only Services industry to grow, supported by stronger commercial banking performance, higher net interest income, and increased transaction and commission fees.
• Looking ahead, the Bank of Jamaica (BOJ) expects some recovery in FY 2026/27 as reconstruction efforts from Hurricane Melissa advance and tourism-related activity, particularly in the western parishes, resumes. The BOJ projects that real GDP will expand by 1.0% to 3.0% in fiscal year 2026/27. However, downside risks persist, particularly related to the potential adverse impact of the conflict in the Middle East on global energy prices, consumer disposable incomes, production costs and sentiment on key service industries such as the Tourism sector.

(Sources: STATIN & NCBCM Research)

• Data released by the Statistical Institute of Jamaica (STATIN) shows the unemployment rate increased to 3.7% in April 2026 from 3.3% in April 2025, reflecting a rise in the number of unemployed persons alongside weaker labour market conditions.
• Jamaica's labour force declined to 1,473,900 persons, with the labour force participation rate falling to 68.4% from 69.3% a year earlier. The reduction was driven by declines in both the male and female labour force, signalling lower participation in economic activity.
• Total employment fell by 1.8% to 1,418,800 persons. Male employment declined by 1.1%, female employment by 2.5%, while youth employment recorded a sharper 9.1% decline, highlighting continued weakness among younger workers.
• The number of unemployed persons increased by 10.0% to 55,000, contributing to the higher unemployment rate. Youth unemployment also worsened, rising to 21,000 persons, with the youth unemployment rate increasing to 11.7%.
• The number of persons outside the labour force increased by 20,500 to 681,900, with increases recorded among both males and females, reinforcing the trend of reduced labour force participation.
• The April 2026 labour market results continue to reflect the lingering effects of Hurricane Melissa, particularly across Jamaica's western parishes. Disruptions to economic activity likely contributed to lower employment, weaker labour force participation, and higher unemployment, indicating that the labour market remains under pressure during the recovery period.

(Sources: STATIN & NCBCM Research)

• The Bahamas' economy maintained its momentum in the first quarter of 2026 (Q1 2026), but the underlying data reinforce the view that growth is settling into a slower trend. According to the Central Bank, construction activity continued to support output through a pipeline of tourism and energy infrastructure projects, while private sector credit expanded by 0.8% in the quarter.
• However, economic indicators are converging toward their medium-to-long-term potential following the exceptional post-pandemic rebound that averaged 8.7% annually between 2021 and 2024, and the external environment has become less supportive since the onset of the Strait of Hormuz closure.
• The composition of Q1 tourism arrivals illustrates why the headline growth figures can be misleading. Total visitor arrivals grew by 17.5% to 3.8 million, but this was driven almost entirely by a 19.6% surge in cruise visitors, who account for 87% of arrivals by volume but only around 10% of tourism expenditure.
• Air arrivals, which proxy for the stayover segment that generates roughly 28% of Gross Domestic Product (GDP), grew by just 5.2%, and the United States (U.S.) passenger departures from Nassau airport, the source of over 80% of stayover visitors, fell by 2.6% in Q1.
• April data extend this trend, with U.S. departures falling a further 1.0% year on year (YoY), bringing the year-to-date (YTD) decline to 2.2%. The non-U.S. international segment continues to grow strongly, up 44.2% YTD, but from a small base that is insufficient to offset U.S. weakness, given that American visitors account for the overwhelming majority of stayover spending.
• The Hormuz-driven oil price shock will constrain economic growth through two channels. Higher airline operating costs are feeding into ticket prices, directly raising the cost of travel for US visitors at a time when consumer confidence is already under pressure from broader tariff-related inflation.
• Simultaneously, domestic energy costs are rising, with Bahamas Power and Light fuel surcharges up by as much as 8.8% YoY in Q1, eroding household purchasing power and weighing on private consumption, the largest component of GDP by expenditure. The government's fuel hedging programme will partially offset the upward price impact but cannot fully insulate the economy from these pressures. Furthermore, oil and jet fuel prices will average significantly higher in 2026 than in 2025 despite the June ceasefire.
• Looking ahead to 2027, growth is expected to remain subdued at around 1.7%, as the post-pandemic construction pipeline gradually winds down, hotel capacity constraints continue to limit upside in the high-value stayover segment, and the labour force grows only slowly. This trajectory is consistent with the view that the Bahamas is converging toward a long-run potential growth rate of around 1.7% per year over 2026–2035, well below the rates recorded during the post-pandemic rebound and reflecting the structural constraints of a small, tourism-dependent island economy operating near capacity.

(Source: BMI, A Fitch Solutions Company)