• The U.S. trade deficit narrowed more than expected in August as businesses imported fewer goods against the backdrop of higher tariffs, a trend that, if sustained, could be a potential tailwind for economic growth in the third quarter.
• However, a drop in imported consumer goods to levels last seen early in the COVID-19 pandemic and a decline in capital goods imports could signal slower consumer and business spending last quarter. "The good news for trade and the U.S. economy is the tariffs are working," said Christopher Rupkey, chief economist at FWDBONDS. "The bad news for trade and the U.S. economy is the tariffs are working. Markets and Federal Reserve officials will scramble to find which is true, but maybe both are."
• The trade gap contracted 23.8% to US$59.6Bn, the Commerce Department's Bureau of Economic Analysis and Census Bureau said on Wednesday, ahead of forecasts done by Economists. The report, which was initially scheduled for release on October 7, was delayed because of the recently ended 43-day shutdown of the government.
• Overall imports decreased 5.1% to US$340.4Bn with Goods imports tumbling 6.6% to US$264.6Bn. The decline was led by a US$11.3Bn plunge in industrial supplies and materials, mostly reflecting a US$9.3Bn decrease in nonmonetary gold. Capital goods imports slipped US$3.4Bn, with imports of computer accessories decreasing US$1.3Bn while those of telecommunications equipment fell US$1.1Bn. But imports of computers increased US$2.3Bn. Food imports declined by US$1.6Bn.
• Exports edged up 0.1% to $280.8Bn, reflecting services. Goods exports dropped 0.3% to $179.0Bn, with shipments of consumer products sliding $1.5Bn amid a $1.2Bn decline in pharmaceutical preparations.
• Exports of industrial supplies and materials, which also include crude oil, eased $0.6Bn. They were pulled down by a $1.1Bn decline in nonmonetary gold. Crude oil exports rose $0.8Bn. Exports of motor vehicles, parts and engines decreased $0.4Bn, but shipments of capital goods increased $2.4Bn to a record $62.4Bn boosted by computers.

(Source: Reuters)

• The European Central Bank will hold interest rates at least until the end of 2026, according to a majority of economists polled by Reuters, who also expected the euro zone economy to grow steadily with contained inflation despite a highly uncertain global outlook.
• A 73.0% majority, 65 of 89, said rates would stay through the middle of next year. A two-thirds majority, 46 of 71, expected no further rate changes through the end of next year, up from 57.0% in last month's survey. Only 21 expected one or more rate cuts by the end of 2026.
• The case for a longer pause has strengthened since the ECB last cut rates in June, with inflation remaining persistently around the 2.0% target, growth stable and unemployment at a record low. By contrast, some of its peers, including the United States, have struggled in part due to the White House applying sweeping tariffs on imported goods at rates not seen since the 1930s.
• Banking on that resilience, the ECB kept rates on hold in October for a third straight meeting. Many Governing Council members suggested the central bank was set for a long hold. Last month, President Christine Lagarde said the central bank was "in a good place," but emphasised that it was not "a fixed good place".

(Source: Reuters)

• Food and Financial Services conglomerate, Grace Kennedy Group Limited (GK), reported a net profit of $6.11Bn for the nine-months ending October 2025. This represented a 7.7% year-over-year (YoY) decline, driven by weaker operating performance in its Food and Money Services segments.
• Revenues amounted to $133.89Bn, reflecting a 5.9% year-over-year increase from $126.39Bn.
• Notably, the Food segment, GK Foods, recorded higher revenues compared to the prior year, driven by the strong performance of its international food business. However, higher-than-anticipated operating expenses weighed down the division’s overall profitability. Similarly, the Jamaican distribution business experienced revenue growth but also faced higher-than-expected warehousing and logistics costs.
• In the Financial Services segment, earnings before tax increased across all sub-segments except Money Services, which recorded a 24.7% decline due to ongoing challenges in the key remittance market, such as the 1% excise tax on cash-based remittance transfers from the U.S., that may have reduced the volume of transactions. The Insurance segment delivered a solid 9.0% increase, supported by growth in its motor and property insurance portfolios. Meanwhile, the Banking and Investment business was up 9.0%, driven by the expansion of First Global Bank’s loan portfolio and disciplined cost management.
• Management continues to assess the full impact of Hurricane Melissa on its profit and loss, as several of its facilities sustained damage. However, operations have resumed in the eastern parishes. Looking ahead, while key facilities, including the Agro-Processors plant in Hounslow, the Montego Bay distribution centre, and the Grace Food Processors (Meats) plant in Savanna-la-Mar, were affected, there are opportunities for the Company to increase revenues and earnings to partially offset potential declines. Increased demand for products from unaffected food facilities, as well as expected growth in the Money Services segment driven by higher transaction volumes, should bolster the company’s performance. Nonetheless, this will be partially tempered by higher insurance payouts, which may ultimately reduce overall earnings.
• GK’s stock price has declined by 12.6% year-to-date, closing at $72.17 on Tuesday. At this price, the stock is trading at a price-to-earnings (P/E) ratio of 9.11x, which is marginally lower than the Main Conglomerate Sector’s average of 9.2x.

(Sources: JSE & NCBCM Research)

• Driven by strong revenue growth from its expanded operations, Future Energy Source Company Limited (FESCO) recorded a net profit of $205.82Mn for the three months ending September 2025, a 20.9% increase relative to the same quarter in 2024, marking its best quarterly performance to date.
• Revenues grew 5.8% year over year to $7.93Bn, despite lower fuel prices, as volume increased (7.1% YTD). FESCO has no control over the supply price of fuel; instead, the Company focuses more on the quantity of fuel sold and its pricing to attract customers.
• Cost of sales grew by 4.7% to $7.83Bn, reflecting both high ex-refinery prices for gasoline and the increase in volumes. However, with revenue growth outpacing the growth in costs, gross profit increased by 23.3% to $506.98Mn, which translated into a 95 basis points (bps) increase in gross profit margin to 6.7%. The improvement in gross profit reflects both increasing throughput (measured in litres of fuel sold) and diversification of product offerings and services (increased retail presence).
• Meanwhile, operating expenses totalled J$313.93Mn (+24.8%), reflecting an expanded asset base, including increased LPG and service station assets, alongside a larger number of operating sites, such as FESCO Oval, for a full quarter. An 18.5% staff cost increase to J$113.20Mn, was the biggest contributor, given an expanded workforce and wage adjustments.
• Fesco’s Q2 numbers contributed to 6M earnings growing by 8.3% YoY. Management anticipates that FY2026 earnings are on track to surpass its FY2025 results by December 2025 with three months to spare.
• FESCO and several of its dealers (FESCO and FESGAS) sustained property damage as a result of Hurricane Melissa, with the total cost still undetermined. However, as of November 5, 2025, all but one of its FESCO-branded stations had reopened. Moreover, the Company anticipates opening one to three new dealer-operated service stations before its financial year ends in March 2026. These expansions could boost revenue and bottom-line growth, ultimately delivering more value to shareholders.
• FESCO’s stock price has decreased by 24.8% since the start of the calendar year, closing Tuesday’s trading session at $2.88. It currently trades at a P/E of 14.8x, which is significantly below the Junior Market Distribution Sector Average of 26.6x.

(Sources: JSE & NCBCM Research)

• The United States (U.S.) has moved forward with reactivating shuttered military installations in Panama and Puerto Rico to increase its regional footprint. However, efforts to do the same in Ecuador failed after voters turned down the proposal in a referendum.
• American forces have resumed operations at Fort Sherman in Panama, a site dormant since the U.S. handed over the Panama Canal Zone in 1999. The drills build on a bilateral security pact that allows shared training to combat threats like organised crime. Panama’s president confirmed the activities target no specific neighbour, though they coincide with U.S. naval deployments in the area.
• In Puerto Rico, the Roosevelt Roads Naval Station in Ceiba has reopened after two decades offline. The base, once central to Caribbean operations, closed in 2004 amid local opposition to bombing runs on Vieques (an Island off Puerto Rico's eastern coast) that caused environmental damage and health issues. Now, construction teams have resurfaced runways and expanded facilities, enabling air and sea missions. U.S. officials operate from five sites across the island as part of a strategy to monitor nearby waters. Puerto Rican groups protested the revival, citing risks of the territory serving as a staging point for actions against Venezuela.
• However, Ecuador presented a different outcome. Leaders there discussed reinstating a U.S. air base at Manta, which American forces left in 2009 after a constitutional ban on foreign militaries. President Daniel Noboa backed the idea for anti-drug efforts, but citizens voted against it. The rejection halts U.S. access, though some training agreements remain in place.
• These steps show U.S. priorities in curbing narcotics flows and responding to Venezuelan instability. Eight warships and aircraft now patrol the Caribbean, with Panama and Puerto Rico providing key logistics. Analysts note the buildup echoes Cold War postures, raising concerns over national autonomy in Latin America. The Pentagon frames the actions as cooperative, yet critics argue they could strain ties with nations wary of external involvement.

(Source: Tico Times)

• Suriname has reached a major milestone toward its first offshore gas production in 2030. President Jennifer Simons announced that the Sloanea-1 gas field in Block 52 has been officially declared economically feasible, following consultations with Staatsolie and Petronas.
• The approval of the commercial field marks a turning point for Suriname's energy sector. With the green light from Staatsolie and Petronas, Suriname is on track for a Final Investment Decision¹ (FID) in the second half of 2026. If this decision is made, production could begin in 2030. Under the partnership, Petronas holds an 80% stake, while Staatsloie, through its subsidiary, Paradise Oil Company, holds the remaining 20%.
• According to the president, the approval means that the recoverable gas volume has been determined and that the project is economically viable. Petronas Suriname is now working on a full development plan, which must first be approved by Staatsolie before the final FID can be issued.
• The Block 52 project is unique for the region. It will be the first large-scale gas development in the Caribbean with a floating liquefied gas production facility. This positions Suriname as a potential energy hub for the surrounding area, strengthening the country's role in the regional energy transition.
• Furthermore, the development of the gas field offers Suriname the opportunity to capitalise on its offshore gas reserves. The project is expected to lead to a stable supply of relatively clean energy, which can both stimulate economic growth and support industrial production.
• President Simons expressed her appreciation to all partners who contributed to the process. "If we want a prosperous future, energy is an essential part of it," she emphasised. With this step, Suriname is laying a solid foundation for sustainable growth and a new phase in the regional energy sector.

_______________________

¹Regarding a gas project, this refers to the decision of a project sponsor to commit to and proceed with the project. Once this decision is made, the sponsor awards to a qualified contractor the engineering, procurement, and construction contract needed to build the gas facility.

(Sources: Suriname Herald)

• A divided U.S. Federal Reserve begins receiving updated economic reports from the now-reopened federal government this week as policymakers hope for clarity in their debate over whether to cut interest rates when they meet in just over three weeks.
• It remains unclear how much of the shutdown-delayed data, including employment, inflation, retail spending, economic growth, and other aspects of the economy, will be available by the time of the upcoming Fed meeting.
• As of Monday, the Bureau of Labour Statistics said it would publish the delayed employment report for September on Thursday, but the White House has said some of the October reports may be skipped altogether, while data gathering for November may also be hampered by a shutdown that stretched to mid-month.
• The lines of debate have been sharply drawn, and minutes of the Fed's October meeting to be released on Wednesday could provide more detail on the split that has emerged over whether the risk of higher inflation remains pronounced enough to delay rate cuts for now, or whether slowing job growth and looser monetary policy should take priority.
• "I am not worried about inflation accelerating or inflation expectations rising significantly," Fed Governor Christopher Waller said on Monday. "My focus is on the labour market, and after months of weakening, it is unlikely that the September jobs report later this week or any other data in the next few weeks would change my view that another cut is in order" when the Fed meets on December 9-10.
• Fed Vice Chair Philip Jefferson meanwhile said the central bank should go "slowly" given the benchmark interest rate, in the 3.75%-to-4.00% range, is likely nearing the level where it will no longer discourage economic activity and put downward pressure on inflation.
• Clear camps have formed within the central bank, with several Fed governors - all appointees of President Donald Trump - arguing for another cut, and several regional reserve bank presidents taking a hard line on inflation. Still, the intensity of those divisions may mask a narrower set of concerns about timing and the desire for more data to show a clearer direction for the economy.
• The Fed's approval of a quarter-percentage-point rate cut at the October 28-29 meeting included dissent in favour of both looser and tighter monetary policy, a rarity in recent decades. Afterward, Fed Chair Jerome Powell offered unusual, explicit guidance about the outcome of the December meeting.
• Those remarks and other recent data have shifted market bets away from a December cut that previously had been given high odds. Policymaker projections in September showed officials themselves anticipated the benchmark interest rate would end the year in the 3.50%-to-3.75% range, a quarter-point below where it is now. Yet that outlook already showed the sharp division emerging, and some officials since then have intensified their concerns about higher inflation.

(Source: Reuters)

• The Bank of England (BoE) will cut interest rates in December and again early next year as inflation cools over the coming months, according to a majority of economists in a Reuters poll who last month expected borrowing costs to remain unchanged for the remainder of this year.
• Next month's meeting will follow British Finance Minister Rachel Reeves' Autumn Budget on November 26, where she is no longer expected to raise income tax but will make up an expected shortfall through smaller tax rises from other sources.
• The Monetary Policy Committee voted 5-4 to leave rates unchanged earlier this month, with BoE Governor Andrew Bailey casting the deciding vote, wanting to wait for evidence of declining inflation before committing to a cut.
• Nearly 80.0% of economists, 48 of 61, expect the BoE will cut Bank Rate by 25 basis points to 3.75% on December 18, according to a Reuters poll taken November 13-18. The rest forecast no move. That compares with 54.0% who expected unchanged rates for the remainder of the year in an October survey. Around that proportion, expect a follow-up cut to 3.50% in Q1 2026.

(Source: Reuters)

• Kingston Wharves Limited (KWL) reported a 19.9% increase in its shareholder profit to $2.50Bn for the 9 months ended September 2025 (9M 2025). This improvement was anchored by robust expansion in revenues.
• 9M revenue growth mirrored that of earnings, increasing by 19.9% to $2.50Bn, driven primarily by improvements from both divisions, Terminal and Logistics Services.
• Terminal Operations Division, its larger segment, contributed $7.30Bn in revenues (+30.5%) and $2.30Bn in Operating profit (+60.2%). This performance was buoyed by strong growth in motor units handled, increased container activity and higher volumes in bulk and breakbulk operations.
• Meanwhile, the Logistics Services Division saw more moderate growth, up 7.9% to $3.30Bn, while operating profit declined by 29.4% to $760.59Mn. The decline was due to higher operating expenses due to ongoing regulatory reforms, business-strengthening initiatives, and revised cost allocations across operating segments
• Despite the drag from Logistics Services, consolidated operating profit climbed 13.6% to J$3.03Bn. A sharp increase in finance costs of 72.1% to 264.41Mn prevented a faster pace of expansion in operating profit. The rise in KWL’s finance costs was partly due to higher interest expenses, likely stemming from a 102.3% increase in short-term debt year on year.
• Despite the extensive damage sustained across the country, KWL successfully protected its assets and maintained uninterrupted operations through proactive preparedness. As Jamaica continues its recovery from Hurricane Melissa, KWL’s operations will be integral in facilitating the movement of relief supplies and supporting the wider national restoration efforts. This strategic positioning presents a significant growth opportunity for the Company and could deliver sustained value for shareholders.
• KWL’s stock has declined 11.9% year-to-date (to J$29.00 at the end of trading on Monday) and has remained largely flat post-Hurricane Melissa, suggesting that investors have not yet priced in the potential upside in the company’s performance as imports rise to support the recovery efforts. , trading at a price-to-earnings (P/E) ratio of 13.5x. This is lower than the Main Market Energy, Industrials and Materials Sector’s average of 14.9x.

(Sources: JSE & NCBCM Research)

• Local Consumer prices rose 0.7% in October, according to the Statistical Institute of Jamaica (STATIN). This upward movement was primarily driven by the ‘Food and Non-Alcoholic Beverages’ (+1.5%) and ‘Housing, Water, Electricity, Gas and Other Fuels’ (+0.8%) segments.
• The outturn in the Food division was influenced mainly by higher prices for some agricultural produce, such as sweet potato, tomato, carrot, and cabbage in the class ‘Vegetables, tubers, plantains, cooking bananas, and pulses’. Higher housing, water and fuel prices reflected increased electricity rates.
• However, this was tempered by a 0.3% decline in the index for the ‘Transport’ division due to lower petrol prices.
• The point-to-point inflation rate between October 2024 and October 2025 increased by 2.9% versus 2.1% in September. This outcome reflects upward contributions from the ‘Food and Non-Alcoholic Beverages’ (3.0%), ‘Housing, Water, Electricity, Gas and Other Fuels’ (4.0%), and ‘Restaurant and Accommodation Services’ (4.0%) divisions.
• Given that the effects of Hurricane Melissa are expected to persist for some time, a further uptick in inflation is anticipated in the coming months. The most affected division is likely to be ‘Food and Non-Alcoholic Beverages,’ as the hurricane significantly disrupted agricultural production in some of the country’s most productive parishes - St. Elizabeth, Trelawny, and Manchester. St Elizabeth alone accounts for some 20% of the island’s agricultural output according to the Ministry of Agriculture, Fisheries, and Mining, Floyd Green. This is expected to exert upward pressure on food prices, with potential spillover effects on related divisions such as ‘Restaurants and Accommodation Services.

(Sources: STATIN, NCBCM Research)