• U.S. President-elect Donald Trump's impending return to the White House appears to put the Federal Reserve on a slower and shallower path for interest rate cuts, with a slew of new policies embraced by the Republican leader poised to juice the economy and stall or reverse, the slowdown in inflation.
• U.S. central bankers are still widely expected to cut the Fed's benchmark interest rate by a quarter of a percentage point to the 4.50%-4.75% range when they wrap up their two-day policy meeting on Thursday.
• Futures contracts tied to the Fed's policy rate are also pricing in a December rate cut, though with slightly less confidence than previously, as the central bank recalibrates borrowing costs to inflation that's now much closer to its 2% target and to a cooling labor market.
• However, in a shift that could be consequential for businesses and households looking to refinance debt or borrow anew, traders are now betting the Fed will cut its policy rate only twice in 2025, lowering it to the 3.75%-4% range and likely taking until July to do so.
• If those bets bear out, the end of the Fed's current rate-cutting campaign would come more than a year sooner, and its policy rate would be a full percentage point higher than most Fed policymakers had projected after their initial rate cut in September.
• Trump campaigned on promises to fix what he sees as an ailing economy and plans to impose higher tariffs, reduce taxes, and launch an immigration crackdown to do that. Economists say those policies are likely to lead to faster economic growth and a tighter labor market that, along with the higher import costs, would put upward pressure on prices. Several Wall Street economists on Wednesday cited those risks as they penciled in fewer Fed rate cuts next year.

(Source: Reuters)

• Newly elected U.S. President Donald Trump will face fiscal challenges that could threaten the country's standing in the global debt markets, hurting investor appetite for the nation's debt securities, and pushing government borrowing costs higher.
• U.S. budget deficits and government debt levels were largely projected to surge under either candidate in the Nov. 5 election, according to several estimates, although Democrat Kamala Harris was expected to add less debt than Trump.
• The prospect of rising government debt levels as Trump's odds improved in recent weeks helped send U.S. government bond yields higher, as many believe his trade and tax policies will reignite inflation and worsen the U.S. fiscal picture. A key hurdle for the new administration will likely be the reinstatement of the federal debt ceiling on Jan. 2, which was suspended in 2023 following protracted negotiations with Congress.
• Washington regularly sets a limit on federal borrowing, which must be approved by a majority of lawmakers. Debt limit disputes in the past have pushed the country to the brink of default and dented its credit rating - a scenario that could be on the cards again in the event of a divided government.
• Barring a quick resolution, the Treasury Department will likely need to use its cash reserves and so-called extraordinary measures - or an array of accounting maneuvers - to fund the government until the so-called X date, when it will no longer be able to pay all its bills. Some analysts estimate that could be in the second half of next year.
• Even without accounting for the likely extension of all or most of the tax cuts, Trump signed into law when he was president in 2017, which expire at the end of next year, government debt held by the public could nearly double over the next decade from $26 trillion at the end of last year, according to forecasts of the nonpartisan Congressional Budget Office.

(Source: Reuters)

• Tourism Minister Hon. Edmund Bartlett has underscored the need for a stronger and more cohesive tourism strategy across Commonwealth nations to leverage the immense potential for economic and social development.
• Speaking at the International Tourism and Investment Conference (ITIC)¹ Global Tourism Investment Summit in London, England, Minister Bartlett called Commonwealth countries to join forces in making tourism a transformative driver of inclusive growth. He pointed to the Commonwealth’s 2.7Bn population across 56 diverse nations as a potent platform for economic collaboration and its youthful demographic with 60% below the age of 29 as a “… powerful force for innovation, adaptability, and growth in tourism”.
• Minister Bartlet also pointed to the Commonwealth’s projections for a combined GDP of $20.0Tn by 2029 reflects not only the economic scale but the diversity among member nations, from large economies like India and the UK to smaller island states.
• Intra-commonwealth trade, which reached $854Bn in 2022, is projected to exceed $1 trillion by 2026, offering vast potential for growth in sectors such as tourism, food trade, foreign direct investment and services.
• Minister Bartlett also advocated for using tourism as a soft power tool to strengthen the Commonwealth’s standing globally and pointed to the immediate positive revenue contributions of tourism to local economies.
• He encouraged the Commonwealth Secretariat to lead the charge in enhancing visitor facilitation, open skies agreements, visa liberalization and technology integration to boost connectivity among member states.

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¹The ITIC Global Tourism Investment Summit is an annual gathering that brings together key stakeholders, including tourism ministers, industry leaders and potential investors, to discuss investment opportunities in sustainable tourism.

(Source: JIS)

• Industry, Investment and Commerce Minister, Senator the Hon. Aubyn Hill, has welcomed the expansion of the Jamaica Packaging Industries (JPI) operations in Jamaica, with its new 130,000-sq. ft. complex located at 693 Spanish Town Road.
• This is the latest investment by the company, resulting in the consolidation of its manufacturing, distribution and retail sales operations under one roof. The investment increases JPI's production capacity by 250%.
• Minister Hill noted that the company’s expansion augurs well for domestic industries, providing locally produced corrugated packaging¹, given that an estimated 60% of cartons used in Jamaica were imported over the last year.
• “They have put in enough capacity to make sure they can make enough to cover that 60% and to cover more later as the market grows. We are looking for this expansion to employ a lot more people. This is an important new investment in the Jamaican manufacturing landscape,” he said.
• Notably, the investment covers property, plant, machinery and equipment, which includes a state-of-the-art corrugator; a high-speed folder gluer machine capable of high-quality printing, slotting, glueing, and folding of cartons; a modern die-cut machine capable of producing more complex display cartons and display trays; and an effluent treatment plant.
• Chairman of JPI, Conrad George, said the facility, located on Kingston’s major industrial belt, is a strategic move that will be beneficial to the country and its local manufacturing, distribution and export sectors.

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¹Corrugated packages are made up of a few layers of material rather than just a single sheet like cardboard. These packages are typically resilient and lightweight and are good when shipping a significant number of packages.

(Source: JIS)

• Trinidad and Tobago’s Finance Minister Colm Imbert has announced that EximBank's forex window has been reopened, with a US$25Mn monthly allocation. In a release on November 3, Imbert noted that the decision to resume the window from November 1 was made by the Cabinet after a comprehensive review by his ministry.
• The window was created in 2020 in response to the COVID-19 pandemic and ran until September 2024. The foreign exchange (FX) facility consumed US$30Mn monthly since its inception.
• Additionally, the government will allocate US$25Mn a month to EximBank for the window, a reduction of US$5Mn from the previous iteration, noting that the forex window for export manufacturers is not being adjusted and will remain.
• The government is also reviewing the role and impact of locally manufactured products, which substitute for imports and will consider greater access to forex for inputs for local consumption. "Further details of this aspect of forex distribution will be announced after consultation with stakeholders."
• Business groups have welcomed the reintroduction of a restructured forex window from the EximBank for essential imports and economists have joined them in rejecting the idea of a "floating" foreign exchange solution to the country's shortage.
• Amid continuing tension about foreign exchange availability, there is a broader trend among local banks being forced to adapt due to FX shortages impacting the banking sector over recent years. Most recently, Scotia Bank T&T announced last week that effective December 1, 2024, it would reduce the maximum US dollar spending limit per calendar month on its credit cards to US$5,000 and US$2,000 until further notice and that the ScotiaCard Visa debit card would no longer offer overseas point-of-sale purchases.
• The decision drew public criticism amid outcries from business owners struggling to access foreign exchange.

(Sources: Trinidad and Tobago Newsday & Trinidad and Tobago Guardian)

• The Dominican Republic’s tourism sector reached a historic milestone with 8,362,285 visitors from January to September, the highest number ever recorded for this period.
• Tourism Minister David Collado announced the figures, highlighting 580,617 visitors in September alone with 468,916 arriving by air and 111,701 by sea. This marks a 55% increase over September 2019 and 21% over 2022.
• So far in 2024, the country has welcomed 6,430,400 air travellers and 1,931,896 cruise passengers. Minister Collado noted this total visitor count reflects a 45% rise from 2019, a 36% increase from 2022, and a 10% increase from 2023. He projects the year will end with 11.5Mn visitors, setting a new record.
• Leading tourist source markets include the United States (39%), Canada (9%), and Colombia (8%). Punta Cana Airport received the most visitors at 56%, followed by Las Américas (27%) and Cibao (12%).

(Source: Dominican Today)

• Trump, 78, recaptured the White House on Wednesday by securing more than the 270 Electoral College votes needed to win the presidency, Edison Research projected, following a campaign of dark rhetoric that deepened the polarization in the country.
• The former president's victory in the swing state of Wisconsin pushed him over the threshold. As of 5:45 a.m. ET Trump had won 279 electoral votes to Harris' 223 with several states yet to be counted. He also led Harris by about 5 million votes in the popular count.
• Republicans won a U.S. Senate majority, but neither party appeared to have an edge in the fight for control of the House of Representatives where Republicans currently hold a narrow majority. Major stock markets around the world rallied following Trump's victory, and the dollar was set for its biggest one-day jump since 2020.
• Trump’s victory will have major implications for U.S. trade and climate change policies, the war in Ukraine, Americans' taxes and immigration. His tariff proposals could spark a fiercer trade war with China and U.S. allies, while his pledges to reduce corporate taxes and implement a spate of new cuts could balloon U.S. debt, economists say. He has also promised to launch a mass deportation campaign targeting immigrants in the country illegally.

(Source: Reuters)

• U.S. services sector activity unexpectedly accelerated in October to a more-than two-year high, and employment strengthened, giving more evidence that the economy is in solid shape as the nation headed to the polls to pick the next president.
• The Institute for Supply Management (ISM) said on Tuesday that its nonmanufacturing purchasing managers (PMI) index accelerated to 56.0 last month from 54.9 the prior month. It was the highest level since August 2022. Economists polled by Reuters had forecast the services PMI declining to 53.8.
• A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy. The ISM views PMI readings above 49 over time as generally indicating an expansion of the overall economy.
• The ISM survey's new orders measure eased to 57.4 in October from 59.4 in September. The ISM's prices paid measure for services inputs ticked down to 58.1 from the prior month's eight-month high of 59.4.
• ISM's measure of services employment rose to 53.0 in October, up from 48.1 in September, a signal of strengthening job growth. The reading appears at odds with last Friday's Labor Department report showing employers sharply slowed hiring last month, adding just 12,000 jobs.
• However, the report was widely seen as overstating job market weakness, given an ongoing Boeing strike that hammered manufacturing jobs and a pair of hurricanes that kept more than half a million people from work.

(Source: Reuters)

• Despite solid growth in total revenues and contained costs, Wigton Windfarm’s profits for the first six months of its financial year ending March 31, 2025 (H1 2025) softened in the absence of one-off income tax adjustments it experienced the prior year.
• In keeping with the Government of Jamaica's policy to facilitate growth in the renewable energy sector, Wigton benefitted from a one-off tax adjustment in H1 2024 given its operations in the renewable energy sector, which bolstered its financial performance. However, there was no tax adjustment for H1 2025, which led to a 38.6% dip in earnings. Excluding the one-off tax adjustment in H1 2024, earnings would have grown by 121.3% in H1 2025.
• Notably, the benefit was enacted within the financial year ending March 31, 2024, allowing the Company to file its 2023 tax return at a rate of 25% while making the relevant adjustments in its financial statements beginning in the second quarter of the financial year ending March 31, 2024.
• Total revenues (sales and other income) rose by 12.9% to J$1.42Bn for H1 2025, reflecting growth in other income to $0.42Bn (+105.6%) which more than compensated for a 4.9% decline in sales to $1.05Bn. Downtime of the wind turbines associated with Hurricane Beryl resulted in a 32.5% reduction in energy sales to $0.38Bn in Q2, weighing on the overall H1 energy production and consequently revenues. With the downtime caused by Beryl, Wigton made provisions for the anticipated proceeds from its business interruption insurance, which boosted other revenues, resulting in a 105.6% increase in other income.   
• Cost of sales (COGS) and general administrative expenses declined by 13.5% and 10.8% to J$228.79Mn and J$190.56Mn respectively for the review period. Continued expense management and operational efficiencies supported the reduction in direct costs. Finance expenses also declined by 13.1% YoY for H1 2025, as the Company continues to benefit from the March 2022 restatement of its Bonds, which introduced lower interest rates and quarterly principal payments.
• At the close of the stock market on November 4th, 2024, Wigton's share price stood at $1.06, implying a P/E ratio of 17.10x, which is above the peer average for the Energy, Industrials and Materials (EIM) industry¹ of 10.69x.
• Looking ahead, Wigton will concentrate on five (5) strategic pillars to achieve sustained profitable growth, one priority being growth through diversification. The company is focused on diversifying into other renewable energy solutions while improving operational efficiency and seeking solo or partnered investment opportunities. This shift is crucial for sustaining shareholder value and ensuring long-term growth by diversifying into new areas and expanding the company’s capabilities to improve earnings.

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¹The EIM industry consists of CCC, MPCCEL, WIG, TJH, KW, and BRG

(Sources: JSE & NCBCM Research)

• Minister of Education, Skills, Youth and Information, Senator Dr. the Hon. Dana Morris Dixon, affirmed the Government of Jamaica’s (GOJ’s) commitment to strengthening the country’s financial regulatory framework to safeguard citizens’ interests and ensure full compliance with global standards.
• Minister Morris Dixon was contributing to a debate on the Financial Services Commission (Amendment) Act, 2024 in the Senate on Friday, November 1, 2024. The Bill seeks to address deficiencies in existing laws to fight money laundering and ensure compliance with international anti-money laundering standards.
• Dixon noted that the legislation represents an essential step to modernise and strengthen Jamaica’s regulatory framework to respond to local needs and put its systems on par with international standards and best practices. She cited the tireless work done to implement policies and laws, which resulted in the country being removed from the Financial Action Task Force’s (FATF) Grey List on June 28 this year.
• Minister Moris Dixon also pointed to the Twin Peaks Model of Financial Regulation and Supervision as one measure in enhancing the country’s financial sector supervision and regulation. Under the twin peaks model, the Bank of Jamaica (BOJ) will be fully responsible for the prudential supervision of all bank and non-bank financial institutions. Meanwhile, the Financial Services Commission (FSC) will be transformed into a new regulatory entity that will supervise the market conduct of all bank and non-bank financial institutions to protect consumers.
• Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill, in piloting the Bill, said…the legislation gives Jamaica another regulatory tool to enhance financial sector stability and offer a greater level of protection for financial consumers.
• While the GOJ pushes for a stronger financial framework, Jamaica faces stability challenges like high interest rates and consequent credit and market risk increases, financial groups’ interconnectedness, climate, and cyber risk. These risks are prevalent in other Caribbean countries. That said, Jamaica has some specificities compared to its Caribbean neighbours like a developed security market and the significant role played by security dealers. Against this background, financial stability is equally as important as other policies requiring comprehensive strategies and the support of the government and other key stakeholders like the Central Bank to support financial stability.

(Sources: JIS, IMF & NCBCM Research)