• The United States (U.S) said it launched new strikes on southern Iran on Monday, May 25, 2026, targeting Iranian missile sites and boats attempting to place mines. The strikes were in "self-defence" and designed "to protect our troops from threats posed by Iranian forces", U.S. Central Command (CENTCOM) said in a statement.
• Iran's Islamic Revolutionary Guard Corps (IRGC) said on Tuesday, May 26th, it had downed a U.S. drone and fired at a fighter jet and another drone that entered Iranian airspace, state media reported. It did not specify when this happened. It added that Iran had the "legitimate and definite" right to retaliate against any U.S. ceasefire violations.
• "U.S. forces conducted self-defence strikes in southern Iran today to protect our troops from threats posed by Iranian forces," CENTCOM spokesperson Captain Tim Hawkins said in a statement on Monday. "U.S. Central Command continues to defend our forces while using restraint during the ongoing ceasefire." Captain Hawkins added that the U.S. strikes targeted an area near Bandar Abbas, a southern port city and home of an Iranian naval base that sits on the Strait of Hormuz, according to the New York Times. Iranian state media had earlier reported that local officials in Bandar Abbas were investigating after explosions were heard.
• It is unclear what impact the latest U.S. strikes will have on any potential peace agreement between the U.S. and Iran. Following the U.S. attack, Secretary of State Marco Rubio said a deal was still possible and pointed to talks on Tuesday between Iran's top negotiator and foreign minister and Qatar's prime minister.
• "We'll see if we can make progress. I think it's a lot of talking back and forth going on about specific language in the initial document, so it'll take a few days," Rubio told reporters during an official visit to India. He said President Donald Trump had "expressed his desire to make it". "He's either going to make a good deal or no deal," Rubio said.
• Asked again later about Monday's strikes, Rubio said: "The straits have to be open. "They're going to be open one way or the other, so they need to be open. "What's happening there is unlawful, it's illegal, it's unsustainable for the world, it's unacceptable."

(Source: BBC)

• British shop price inflation sped up in May on the back of disruption and higher energy costs caused by the Iran ‌war, according to a retail industry group, which said the government had to do more to keep costs down.
• The British Retail Consortium's (BRC’s) monthly survey of major chains published on Tuesday, May 206, 2026, showed that ⁠prices in May were 1.2% higher than a year earlier, up from a 1.0% rise in April. Furniture and health and beauty products rose the most, reflecting rising raw material and shipping costs. However, food price inflation slowed to 2.7%, its lowest in a year, from 3.1%.
• BRC Chief Executive Helen Dickinson said the government, which ‌has ⁠pressed supermarkets to slow price increases and flirted with the idea of demanding price caps this month, had to play its part in bringing down costs for retailers. "Reducing ⁠the non-commodity charges, taxes and levies that make up more than two-thirds of energy bills, and cutting red tape would ⁠help keep inflation down," Dickinson said.
• Britain's broader official consumer price inflation index fell to 2.8% in April but ⁠is expected to rise again to around 4% in the coming months due to the energy price shock.

(Source: Reuters)

• On May 18, 2026, the World Bank (International Bank for Reconstruction and Development, or IBRD) priced a catastrophe (cat) bond that finances US$200.0Mn of hurricane insurance coverage for Jamaica, replacing the previous US$150.0Mn in cat bond coverage that was paid out to Jamaica following Hurricane Melissa in October 2025. The transaction was oversubscribed, allowing the World Bank to upsize the issuance from its initial target.
• The bond was issued under IBRD's "capital at risk" notes program (CAR 137), which enables member countries to transfer disaster-related risk to global capital markets. Under the transaction, the World Bank issues the notes and enters into a risk transfer agreement with the Government of Jamaica, which pays a premium based on the terms achieved in capital markets. The covered peril is a Named Storm, with a per-occurrence parametric trigger¹.
• The cat bond forms part of Jamaica's multi-layered disaster risk financing strategy, complementing budget reserves, contingent financing, and conventional insurance. The instrument is designed to absorb the fiscal impact of low-frequency, high-impact hurricane events, ensuring timely access to liquidity following extreme weather.
• Key terms include a settlement date of May 26, 2026 and a scheduled maturity of May 23, 2030. The issue price was at par, with the coupon set at Compounded SOFR plus a Funding Margin of 0.12% and a Risk Margin of 6.75% per annum.
• Investor distribution skewed heavily toward dedicated insurance-linked securities (ILS) capital, taking 69% of the issuance, asset managers 25%, and insurers/reinsurers 6%. Geographically, allocation was led by Europe (42%) and North America (41%), with Bermuda accounting for 16% and Asia/Australia 1%. The composition reflects the deep institutional pool that has developed around parametric sovereign cat bonds.
• By pre-funding up to US$200.0Mn of hurricane risk through capital markets, it preserves Jamaica's fiscal headroom (budget reserves, contingent credit lines, IMF/multilateral facilities) to respond to El Niño-related shocks, should they materialise alongside or independently of the 2026 Atlantic hurricane season.
• Following Hurricane Melissa, CAT bonds proved their worth, providing a rapid, transparent infusion of cash that bypassed the lengthy claims adjustment process typical of standard insurance. Because the bond utilised a parametric trigger, the US$150.0Mn payout was triggered automatically and disbursed within weeks of the storm.

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¹Bases the payout on objective physical data like central pressure and track location rather than a subjective assessment of damage.

(Sources: World Bank, Relief Web & NCBCM Research)

• On May 20, 2026, the Planning Institute of Jamaica (PIOJ) released preliminary estimates showing real GDP contracted by 5.9% in the January–March 2026 quarter relative to the same period in 2025. The decline was broad-based, with the Goods Producing Industry down 11.2% and the Services Industry down 4.1%, reflecting the lingering disruption from Hurricane Melissa and the early onset of cost pressures linked to the Middle East conflict.
• Within the Goods Producing industry, Mining & Quarrying recorded the steepest decline at -26.6%, followed by Agriculture, Forestry & Fishing at -20.3%, Manufacturing at -7.7%, and Construction at -1.3%. The Mining contraction extends the -37.5% drop posted in Oct–Dec 2025, reflecting continued disruption to alumina and bauxite production in the wake of the hurricane. Declines in Agricultural output were sharpest in the western parishes, with St Elizabeth (39.9%) and Hanover (38.1%) bearing the brunt of post-hurricane crop damage. Agricultural output in St. Thomas also saw a steep decline of 27.2%.
• Within the Services industry, Accommodation & Food Service Activities fell 20.4% (an improvement from -31.0% in Oct–Dec 2025 but still deeply negative), Electricity, Water Supply & Waste Management declined 10.3%, Information & Communication contracted 7.1%, Transport & Storage fell 5.4%, and Education, Health & Other Services declined 5.2%. Only two sub-industries posted growth: Public Administration & Defence (+1.9%) and Financial & Insurance Activities (+1.8%), the latter reflects the sector's relative insulation from the physical shock.
• For the full Fiscal Year 2025/26, the economy is estimated to have contracted by 1.7%, with Goods Producing down 2.2% and Services down 1.5%. The annual contraction was driven by Mining & Quarrying (-16.0%) and Accommodation & Food Service Activities (-10.9%), partially offset by Financial & Insurance Activities (+3.1%), Public Administration (+1.1%) and Construction (+0.6%).
• Labour market indicators have, however, remained resilient. As of January 2026, the unemployment rate stood at 3.6% (down from 3.7% in January 2025), with youth unemployment improving to 10.7% from 12.3%.
• Preliminary high-frequency data for April 2026 point to continued near-term weakness, with airport arrivals down 22.5% and alumina production down 27.3% versus April 2025. The data confirm that tourism and alumina, two of Jamaica's principal foreign-exchange earners, remain materially impaired heading into the April–June quarter.
• Looking ahead, the PIOJ projects a further contraction of 3.0%–4.0% in April–June 2026, driven by ongoing geopolitical tensions in the Middle East and slow recovery in storm-affected industries. For Fiscal Year 2026/27, however, PIOJ forecasts growth in the range of 1.0%–3.0%, with all industries expected to expand as the economy recovers from the 2025 weather-related shock. This growth band is consistent with the Bank of Jamaica's own FY2026/27 projection.

(Source: Planning Institute of Jamaica)

• Trinidad and Tobago's (T&T’s) exports and overall trade profile are poised to benefit significantly from the surge in global energy prices since the onset of the United States (U.S.)-Iran conflict, with the current account surplus set to widen substantially from 4.7% of GDP in 2025 to 6.5% in 2026.
• Following 2025, which saw energy exports rise, more than offsetting a decline in non-energy exports, BMI expects T&T’s trade position to strengthen further in 2026. This will be driven primarily by surging energy exports, which accounted for 83.3% of total exports in 2025, positioning the country to benefit enormously from recent energy market developments. BMI also notes, however, that T&T’s primary income deficit will widen in 2026, as surging profits generated by foreign oil companies are repatriated, offsetting some of the overall boost to the current account. This mirrors historical trends, seen recently when oil prices rose in 2022.
• The expectation of increased energy exports in 2026 is based on two supporting factors: strongly favourable terms-of-trade support from the U.S.-Iran conflict and elevated energy prices, alongside the expectation that hydrocarbon production will rise in 2026 as newly operational fields ramp up output.
• Notably, BP's Cypre field, which opened in April 2025 and completed its seven-well drilling programme in December 2025, will support output gains. Q1 2026 LNG production data show a year-over-year output expansion in volume terms, and combined with supportive prices, this will help propel exports through the year as the conflict shows few signs of near-term abatement. Indeed, T&T’s trade profile is strongly correlated with energy prices, with a 1.0% increase in the Brent crude price associated with a 0.52% increase in goods exports in the current quarter and a 0.30% increase in the quarter ahead.
• Additionally, this development will have well-timed benefits for T&T’s external buffers. Strong earnings and soaring prices will help provide support for the country's currency regime and reserve position. Furthermore, expectations are that the Central Bank of Trinidad and Tobago will welcome this development, especially given that declining reserve levels may otherwise necessitate a rise in the policy rate to counter capital outflows – a negative development given soft domestic demand. In the near term, these pressures will be muted by the supportive external environment that will support reserves accumulation, which has risen in recent months.
• That said, risks to the outlook are heightened but balanced, driven primarily by uncertainty surrounding ongoing Middle East geopolitical strife. Should oil prices remain higher for longer than expected, T&T’s current account surplus and trade balance could outperform the forecast. Conversely, a quicker resolution to the conflict would represent a downside risk, as energy prices would likely fall back more rapidly than currently anticipated, weighing on the trade balance and buffers.

(Source: BMI, A Fitch Solutions Company)

• BMI continues to expect that the Dominican Republic (DR) economy will expand by 3.8% in 2026, after disappointing growth of just 2.1% in 2025. Data released in the year-to-date have been remarkably strong, with the monthly activity index consistent with a roughly 2.0% quarter-over-quarter (QoQ) increase in output after a relatively soft end to 2025 due in part to adverse weather events. This pick-up appears to largely reflect a reacceleration of activity in the construction sector, where the imposition of tighter migration controls and some public budget execution issues acted as headwinds in 2025.
• Meanwhile, a tight domestic labour market and continued robust performance for the tourism industry, which has been underpinned by steady increases in sectoral capacity, have helped to sustain steady growth in services, a trend that is expected to continue.
• While the DR is a net energy importer, the government’s decision to shield the private sector from much of the oil price shock stemming from the U.S.-Iran conflict will help to reduce the direct impact on the economy. This does raise some fiscal risks (the subsidies are estimated to cost the government between DOP1.0-1.5Bn a week, or .02% of GDP), but the hit to the public finances should be manageable with the deficit set to widen from 3.6% of GDP to 4.0%.
• In this scenario, BMI anticipates that inflation will remain close to the upper end of the BCRD’s (Banco Central de la República Dominicana’s) 3.0-5.0% target range, reducing pressure on the central bank to hike. With views for no Federal Reserve (Fed) hikes this year, BMI assumes the BCRD will hold its policy rate at 5.25% in 2026.
• Risks to the projections are broadly balanced. While BMI remains constructive on growth, embedded in its forecast is an assumption that a more challenging global backdrop contributes to a modest deceleration in economic activity over Q2 that may fail to materialise given the data available through March. On the other hand, expectations are that the Strait of Hormuz will reopen by mid-year, triggering a sharp drop in oil prices over the second half of 2026. If the Strait remains closed, oil prices could reach above US$150/bbl, raising the risk of a global recession and leaving the Dominican government with a difficult decision on whether to retain existing fuel price subsidies or phase them out and pass the cost to consumers.

(Source: BMI, A Fitch Solutions Company)

• Oil prices were volatile on Thursday, May 21, 2026, ultimately settling about 2% lower as uncertainty over prospects for resolving the U.S.-Israeli conflict with Iran weighed on the market. Brent crude futures settled at $102.58 a barrel, down $2.44, or 2.3%, while U.S. West Texas Intermediate (WTI) futures closed at $96.35, down 1.9%, their lowest in nearly two weeks.
• Earlier in the session, prices had surged as much as 4% after Reuters reported that Iran's supreme leader issued a directive that dented hopes for a swift resolution to the war. However, prices later reversed course as the market weighed mixed diplomatic signals.
• The report signalled that Tehran is hardening its stance on a key U.S. demand. The directive from Supreme Leader Ayatollah Mojtaba Khamenei could further complicate negotiations and frustrate U.S. President Donald Trump’s efforts to broker an end to the war.
• Gains accelerated after U.S. Secretary of State Marco Rubio said a proposed tolling system in the Strait of Hormuz would make a diplomatic deal unfeasible. However, prices later pared gains after he added that officials from Pakistan, which is acting as a mediator, will travel to Iran for talks.
• Iran also announced a new “Persian Gulf Strait Authority” to oversee a “controlled maritime zone” in the Strait of Hormuz. Further, Iran warned against further attacks and unveiled steps entrenching its control of the strait, which remains mostly closed. Before the war, the strait carried oil and liquefied natural gas (LNG) shipments equal to about 20% of global consumption.
• Notably, supply risks remain a major concern. The start of peak summer fuel demand, combined with the lack of new oil exports from the Middle East and depleting stocks, could push the oil market into the “red zone” in July-August, according to International Energy Agency (IEA) head, Fatih Birol. Even if the Middle East conflict ended now, full oil flows through the Strait of Hormuz would not return before the first or second quarter of 2027, according to Abu Dhabi ​National Oil Company (ADNOC) CEO Sultan Al Jaber.

(Sources: Reuters)

• British inflation cooled by more than expected in April, but the slowdown did little to mask a tough outlook for households, with global costs from the Iran war set to hit them harder later this year.
• Britain said on Wednesday, May 20, 2026, that it had secured a trade deal with the Gulf Cooperation Council (GCC) worth $5Bn a year in the long run, deepening economic ties with allies in a region dealing with the fallout from the Iran war.
• The deal with the GCC, which consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, comes after U.S.-Israeli strikes against Iran in February triggered Iranian attacks on other countries in the region, putting strain on energy and food supplies. At a time of increased instability, Britain’s Trade Minister Peter Kyle said the announcement sends a clear signal of confidence, giving UK exporters the certainty they need to plan ahead.
• The British government noted that the deal would be worth £3.7Bn each year in the long term, more than double a previous estimate of £1.6Bn, as the final deal went further on both trade liberalisation and service sector commitments than previously expected. In addition, it will remove 93% of GCC tariffs on British goods, equivalent to the removal of £580Mn worth of tariffs by the deal’s tenth year. Two-thirds of the tariffs will be removed as soon as the deal comes into force.
• Autos, aerospace, electronics, and food and drink are among the sectors expected to benefit, with cereals, cheddar cheese, chocolate, and butter all becoming tariff-free. In return, Britain has lowered tariffs to the GCC, though the countries’ main exports to Britain, oil and gas, are already tariff-free.
• On services, Britain locked in current access to the GCC so businesses could expand without facing new barriers, while Gulf countries can also grow their own service sectors through the deal. The agreement spans trade in goods and services, financial services, digital trade, investment protection, telecommunications, and other areas.
• However, the deal has drawn criticism from campaigners because it does not contain any language around human rights. Tom Wills, director of the Trade Justice Movement, said that by failing to negotiate enforceable human rights protections, the UK had taken “a moral step backwards.”

(Source: Reuters)

• The March quarter earnings season is still underway, and today the spotlight is on real estate stocks, which have produced mixed earnings thus far.
• Relative to the March 2025 quarter, 138 Student Living (138SL) achieved a 56.8% surge in quarterly earnings to $120.74Mn, owing to higher revenues and lower expenses. Buoyed by improved rental rates and maintenance of a 98% average student occupancy rate, total revenues increased by 6.8% to $410.01Mn. Administrative expenses also decreased by 1.6% to $218.18Mn amid enhanced operational discipline, effective cost management, and general efficiency measures across its student housing properties. Consequently, its operating margins improved from 42.2% to 46.8%. A 9.5% decline in finance costs to $67.26Mn and a 64.8% decline in taxation to $3.83Mn also contributed to the stronger profits. Notwithstanding strong earnings, a bulk of current assets is still tied up in a growing $711.80Mn receivables balance, as it remains in talks with The University of the West Indies to resolve its variation claim¹. Talks are at an advanced stage, according to management. 138SL closed at $3.08 on May 20^th, down 2.61% YTD and trades at a P/E of 5.13x below the Main Market Real Estate Average of 6.5x.
• Meanwhile, Sagicor Real Estate X Fund (XFUND) Limited recorded a 2.7% decline in earnings to $391.47Mn, reflecting lower revenues of $2.37Bn (-3.0%), despite notable growth within the group's core hospitality segments. Segment revenues from direct hotel and commercial operations improved by 2.3% to reach $2.30Bn. However, this was countered by a $28.98Mn capital loss, which is a $96.74Mn reversal from March 2025. Total operating expenses were tightly controlled during the quarter (down 4.9% to $1.80Bn), demonstrating improved cost efficiency across the board. This enhanced cost management, alongside resilient core performance, allowed the group to mitigate the falloff in its earnings under challenging operating conditions, including high interest rates, depressed asset valuations and Hurricane Melissa’s fallout. XFUND closed trading at $9.90 yesterday and is up 23.8% YTD and trades at a P/E of 22.5x, far exceeding the Main Market Real Estate Average.
• Lastly, as we’ve previously reported on May 15^th, Kingston Properties Limited (KPREIT) reported a decline 34.2% in earnings to US$658,957, largely due to the absence of fair value and property disposal gains. This was despite rental income rose 31.7% to US$1.82Mn, driven by portfolio expansion, particularly in the UK (+165%), and stable contributions from Jamaica and the Cayman Islands. Management fees also increased by 26.7%. KPREIT closed at $10.62, is up 13.0% YTD and trades at a P/E of 15.45x.
• Stanley Motta (SML) and Eppley CPFV have yet to release their March Earnings.

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¹According to the company website, the claim refers to compensation demand by 138SL against the campus administration arising from differences in the original 2015 accommodation concession agreement between the parties and the final, “as-built” configuration of Irvine Hall, which changed from intended double rooms to largely single rooms. The claim, which was initiated around 2019-2020, has been subject to long-term negotiations between the two parties.

(Sources: Company Filings via JSE & NCBCM Research)

• Following its meetings on 19 and 20 May 2026, the Bank of Jamaica's (BOJ's) Monetary Policy Committee (MPC) unanimously decided to maintain the policy rate at 5.50%. The decision was framed against a backdrop of heightened global uncertainty stemming from the deepening conflict in the Middle East, which has driven further increases in key international commodity prices, particularly crude oil.
• The MPC assessed that maintaining the current stance remains appropriate to limit second-round price increases resulting from higher international commodity prices. Annual headline inflation stood at 4.3% at April 2026, in line with March 2026 but above the Bank's projection, while core inflation rose to 4.1% (Mar-26: 4.0%). Prospectively, headline inflation is forecast to trend upward over the June 2026 and September 2026 quarters and breach the 4.0%–6.0% target range, with the extent of the breach contingent on the severity and duration of the conflict.
• Since the Bank's March 2026 assessment, the Middle East conflict has deepened, with more extensive damage to critical oil infrastructure and supply chain disruptions, leaving international fuel prices projected to remain elevated. This is expected to place upward pressure on electricity costs in Jamaica, while domestic gas prices have already risen and may accelerate further, feeding into transport-related inflation and broader second-round price increases across goods and services.
• Nonetheless, headline inflation is forecast to gradually return to the Bank's target range as global oil supplies return to normal levels. However, this is expected to be partly offset by domestic demand pressures, stemming primarily from fiscal spending to support post-Hurricane Melissa rebuilding efforts.
• Even so, inflation risks are skewed to the upside, driven by the potential for a broader Middle East conflict, El Niño-related pressure on agricultural prices, and stronger-than-anticipated post-hurricane recovery spending. Inflation expectations have already begun shifting, with the April 2026 business survey showing 12-month-ahead expectations rising to 7.1% from 6.5%. Weaker consumer purchasing power provides a partial offset on the downside.
• The BOJ also continues to monitor key indicators and stability metrics. Private sector credit growth moderated to 6.5% in the March 2026 quarter (Dec-25: 7.8%), reflecting a slowdown in lending to both businesses (+5.1% vs. +7.5%) and individuals (+7.5% vs. +8.3%). The domestic banking system remains sound with adequate capital and liquidity.
• Real GDP growth for FY2026/27 is projected between 1.0%–3.0%, with risks skewed to the downside reflecting the potential adverse effects of the Middle East conflict on services industries, alongside the drag from higher imported input costs. The negative impact of the conflict on the external accounts is also expected to be significant, though the Bank's strong foreign reserves continue to provide an important buffer, supporting the orderly functioning of the FX market and helping to contain imported inflation.
• Overall, the MPC signalled a cautious but vigilant approach, emphasising its readiness to adjust the monetary policy stance if the Middle East conflict is protracted and results in sustained price increases. The next policy decision announcement is scheduled for 29 June 2026.

(Sources: Bank of Jamaica & NCBCM Research)