• Bonds sold off and global equity markets failed to fully shake off New Year blues on Thursday after U.S. unemployment data indicated a resilient labor market, tempering expectations of Federal Reserve interest rate cuts in 2024.
• The focus has turned to the U.S. central bank's efforts to steer the economy to a soft landing. "The real federal funds rate doesn't need to be as high and as restrictive as it currently is. Still, the Fed will need more evidence of inflation progress to get those cuts," said Roosevelt Bowman, senior investment strategist at Bernstein Private Wealth Management in New York.
• The number of Americans filing new claims for unemployment benefits fell more than expected last week. Separately, the Automatic Data Processing (ADP) National Employment Report showed U.S. private employers hired more workers than expected in December.
• "The combination of better-than-expected ADP and lower-than-expected-jobless claims was enough to inspire a little bit of selling pressure on Treasuries," said Ben Jeffery, a U.S. rates strategist at BMO Capital Markets in New York. The reports "definitely moderate the odds of a near-term rate cut from the Fed just given the fact that the job market remains in a relatively good place," he said.
• Fed policymakers have indicated they expect three rate cuts this year. Futures traders have trimmed the total estimated reduction by December to just over 137 basis points (bps) from expectations of more than 160 bps late last year.
• Minutes from the U.S. central bank's December policy meeting offered few clues on when the Fed might start cutting rates. Traders see a 66.4% chance for at least a 25 bps rate cut in March and about a 92% probability in May, according to the CME Group's FedWatch.

(Sources: Reuters)

• Sagicor Group Jamaica Limited (SGJ) has announced the Group’s further expansion into the Latin American market, effective January 1, 2024. This strategic move was done through a joint venture with its Costa Rican partners (Capital & Advice Inc), for the acquisition of Sagicor Panama from Sagicor Life Inc. in Barbados.
• Christopher Zacca, President and CEO of SGJ, expressed that this is a tremendous achievement for the company, stating, "The acquisition of Sagicor Panama is a key step in our strategic objective of regional expansion.”
• Sagicor Panama currently offers a range of products, including Group and Individual Life insurance, Group and Individual Health insurance, and Personal Accident insurance. With this venture, Sagicor Group Jamaica aims to further diversify its product offerings in the Latin American market.
• This expansion marks a major achievement for Sagicor Group Jamaica as it increases its presence in the Latin American market and continues to position the company for further growth.

(Source: JSE)

• Residents and business interests in the northeastern parishes of St. Ann, St. Mary, and Portland are eagerly anticipating the introduction of American Airlines’ new flights between Miami International Airport, Florida, and Ian Fleming International Airport in Boscobel, St. Mary.
• The airline, headquartered in Texas, recently announced that it will operate two weekly flights on the route starting on February 24, 2024, using its Embraer 175 aircraft, which has a capacity for 76 passengers. This will be the first US airline to service the Ian Fleming airport.
• One of the key advantages being highlighted is the convenience that the new flight route will bring to visitors staying in Ocho Rios, Boscobel, Tower Isle, and Port Antonio.
• Portland businessman Danny Royal tells JIS News that the resort parish “might well be the biggest beneficiary” of this development. He further highlighted that the distance from the Sangster Airport in Montego Bay has placed Port Antonio at a major disadvantage for decades in terms of tourist arrivals, where this is a major start and catalyst for bigger things to come.
• Calling the development an important step for tourism growth in the northeastern region, Tourism Minister Hon. Edmund Bartlett, says the move justifies the Government’s vision of expanding the Ian Fleming Airport.
• With direct access to Ian Fleming International Airport, travelers will no longer have to endure the lengthy road journey to reach Port Antonio from Montego Bay. This is expected to significantly enhance the overall visitor experience and accessibility to the northeastern region of the island. Furthermore, businesses in those areas are looking forward to the economic benefits that the new flight route is anticipated to bring.

 (Source: JIS News)

• The Central Bank of The Bahamas has announced that it is relaxing the lending rules for residential mortgages provided by domestic banks and credit unions by revising the minimum equity injection requirement, a move expected to alleviate the financial burden for qualified borrowers and allow some additional individuals to qualify for credit.
• The announcement was made “with immediate effect,” and the mortgage indemnity insurance is removed from the Central Bank’s stipulation for borrowers to qualify for a reduced equity or down payment amount on residential mortgages. The regulator noted that the minimum down payment for such mortgages was 15% in the absence of insurance.
• “Moreover, in line with the relaxed rules for other personal lending, issued in August 2022, financial institutions may also vary or set lower down payment requirements for residential mortgages, in line with their internal frameworks for assessing and managing individual borrower risks,” the Central Bank said in a statement.
• The regulator specified, however, that lending institutions are directed to observe that personal lending is still subject to the borrower’s total debt service ratio remaining within a prudent limit of 50%. The exceptions are debt restructurings and/or consolidations for borrowers who are already indebted beyond this threshold and for whom outstanding obligations are not increased as a result of the restructuring and/or consolidations.
• The regulator pledged that it would continue to monitor the impact of credit trends on the outlook for external reserves and domestic financial stability and that if conditions justify interventions, it may tighten or relax the minimum qualification standards for new credits or enhance any of its macro-prudential or micro-prudential tools as deemed necessary.

(Source: Eyewitness News)

• Guyana will Chair the Conference of Heads of Government for the period January 1 to June 30, 2024, as President Dr Irfaan Ali prepares to take the helm as CARICOM Chairman.  
• President Ali, in a statement as incoming Chairman of Caricom, highlighted that the New Year brings renewed possibilities to continue targeted programmes to advance CARICOM’s strategic priorities to pursue the Region’s development goals and strive for peace and prosperity across the Caribbean Community.  
• He also noted that “Regional security is an increasingly critical matter. We live in a world where peace is challenged from one corner of the universe to the next. We ended 2023, however, with Caricom’s robust role in assuring the rule of international peace and security in our corner of the world and ensuring that Latin America and the Caribbean as a whole remained a Zone of Peace. We shall continue in 2024 with this respect for international law. We all remain committed to peacefully and by legal means resolving border controversies.”  
• Caricom will continue to address crime and violence, including combatting the illegal weapons trade, through its “War on Guns” campaign. President Ali says CARICOM will leave no stone unturned in its efforts to return Member State Haiti, to peace and stability as he maintains the Region must remain a Zone of Peace.
• Turning to the issue of the Region’s food and nutrition security, President Ali says despite adverse challenges, including climate change, CARICOM Member States have made steady progress towards achieving the ‘25% by 2025’ target to reduce the Region’s food import bill.  
• He says the agricultural sector will continue to be supported with expected innovations, and crucial to this initiative is the need to improve regional transportation, which will remain one of Caricom’s top priorities.  

 (Sources: Loop Caribbean News)

• Federal Reserve officials in December launched an expansive debate about a coming turn in U.S. monetary policy, with fresh concerns voiced about how long the economy could hold up under current high interest rates and at least initial discussion about when to halt the rundown of its balance sheet, according to minutes of the Dec. 12-13 meeting.
• Fed Chair Jerome Powell had laid out the broad contours of the meeting, noting that the central bank was likely done raising interest rates and expected to begin reducing borrowing costs by the end of 2024.
• While the minutes did not provide direct clues about when rate cuts might commence, they reflected a growing sense that inflation is under control and growing concern about the risks that "overly restrictive" monetary policy may pose to the economy.
• The document caps a year that began with the Fed still uncertain about how much harm it might have to inflict on the economy to control inflation and Powell warning of "pain" to come, but ended with inflation falling faster than anticipated and policymakers becoming increasingly hopeful that they could tame inflation while skirting the recession even staff members thought was sure to come.
• Notably, for the first time since June 2022, policymakers did not use the phrase "unacceptably high" to describe inflation, according to the minutes, while laying out reasons why they felt inflation would continue to fall.
• There were still risks, with several participants saying they felt the Fed had gotten all the help it could expect from improved supply chains to lower inflation, with tight monetary policy still needed to dampen demand and new geopolitical risks possibly causing inflation progress to stall.

(Source: Reuters)

• Canada's factory sector contracted in December at its steepest pace since the early months of the COVID-19 pandemic, as the rising cost of manufactured goods crimped demand, data showed on Tuesday.
• The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) fell to a seasonally adjusted 45.4 in December from 47.7 in November, its lowest level since May 2020. A reading below 50 indicates contraction in the sector. The PMI has been below that threshold since May, the longest stretch in data going back to October 2010.
• "Canada's manufacturing economy endured a difficult end to 2023 and with that rounded off a challenging year for the sector overall," Paul Smith, economics director at S&P Global Market Intelligence, said in a statement. "Accelerated declines in both production and new orders were registered, amid reports that demand for manufactured goods remains subdued."
• The output index fell to 45.4 from 46.1 in November and the new orders index was at 42.5, down from 45.4. New export orders also declined more sharply, the data showed. The measure of employment moved back into contraction territory and prices rose, but the pace of price increases decelerated, which could be one potential bright spot heading into 2024.
• "Firms noted that clients remain burdened by high prices, and these continued to rise throughout the supply chain over the month, Smith said. "However, at least rates of inflation eased according to the PMI data, and given the increasingly weak demand environment, are likely to continue to fall in the months ahead."
• The input price index was at 54.1, down from 55.6 in November and the output price measure fell to 52.7 from 54.8.
• The PMI is an index of the prevailing direction of economic trends in the manufacturing and service sectors.

(Source: Reuters)

• Listed company MPC Caribbean Clean Energy, has secured financing for Phase II of its Monte Plata solar park project in the Dominican Republic. The project, already under construction, includes a 42 megawatt peak solar PV plant.
• The funding was secured from Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V (FMO), the Dutch Entrepreneurial Development Bank, and Corporación Interamericana Para El Financiamiento De Infraestructura S.A. (CIFI), a Panamanian non-banking financial entity. Monte Plata is a 36% subsidiary of CCEF ANSA Renewable Energies Holdings Limited, in which MPC holds a 50% stake.
• MPC leads an equity consortium, alongside Trinidad and Tobago-based corporate group ANSA McAL Limited (TTSE: AMCL) and two unnamed minority investors from the Dominican Republic and Canada, which has set out to acquire the plant in full.
• Monte Plata operates under a 20-year US-dollar-denominated power purchase agreement (PPA) with the state-owned Dominican Corporation of State Electrical Companies. “Over its operational lifespan, the expanded solar park is poised to mitigate the production of nearly 1.5Mn tons of CO2 during the life span of 20 years,” says Gözde Kurusoy, MPC’s director of project finance.
• The financial closure of Phase II underscores MPC Caribbean Clean Energy Fund’s commitment to the Dominican Republic, fostering economic growth, supporting the transition to a low-carbon economy, and driving positive community and social impact. Phase II of the project is expected to reach commercial operation date in the fourth quarter of 2024. The increased capacity is expected to increase revenues and generate attractive risk-adjusted returns.
• MPC Caribbean Clean Energy is a Caribbean-based investment company with a vision to boost investments into renewable energy projects in the Caribbean. The Company is investing into significant growth potential in renewable energy projects in the Caribbean region, where these energy sources are increasingly becoming an economical form of new electricity generation.

(Source: Solar industry)

• The newly formed Ghana Jamaica Chamber of Commerce [GhanJacc] says it will be providing avenues for Jamaican companies to explore how to expand to Ghana. According to Derrick Cobbinah, President of GhanJacc, there are companies in Jamaica that could provide solutions to problems in Ghana and vice versa.
• In keeping with that, he revealed in an interview with Radio Jamaica News that two "big" trade missions are being planned, one from Ghana to Jamaica and the other from Jamaica to Ghana. He highlighted there will also be monthly networking events to create awareness in terms of joining the Chamber.
• Another area of emphasis will be the market entry service, which is key as many companies out there would be looking at moving over to Ghana, or vice versa. In that regard, Mr. Cobbinah said the chamber will guide its members on how to set up shops in both countries, with a "Doing business in Ghana and Doing business in Jamaica" document being prepared to make the process less difficult. This document is expected to provide guidance, in meeting "the right distributors and the right suppliers”.

(Source: RJR News)

• Ongoing and emerging geopolitical factors are clouding the external economic policy outlook for 2024, the Central Bank of Trinidad and Tobago stated in its Monetary Policy announcement for December.
• Domestically, macroeconomic conditions appear favourable based on the retreat of inflation, sustained private sector credit growth, and robust non-energy sector activity.  However, short-term TT/US interest rate differentials remain a concern for the external balance, but could narrow further based on the projected downward path of foreign rates.
• The Central Bank stated that in reviewing external developments, the Monetary Policy Committee (MPC) took particular note of the rapid slowdown in global inflation and the less aggressive monetary stance adopted by major central banks.
• Given these factors, the MPC agreed to maintain the repo rate at 3.50%. At the same time, the MPC considered that the dynamic nature of external economic developments in 2023, their repercussions on Trinidad and Tobago's open economy, and the expected continuation of that situation in 2024 warranted continued vigilance and agility on the part of the Central Bank to potentially rapidly changing circumstances.
• The MPC also noted that the Central Bank will continue to carefully monitor and analyse international and domestic developments and prospects going forward.

(Sources: Trinidad Express Newspaper and Central Bank of Trinidad and Tobago)