• Environmental stresses associated with El Nino weather conditions could add to the fiscal, growth, inflationary and external liquidity challenges facing vulnerable sovereigns within the region, according to Fitch Ratings.
• The El Nino phenomenon can be associated with unusually dry conditions in some parts of the world and with greater-than-normal levels of rain in others. Environmental conditions that dampen economic activity could hurt the credit profiles of vulnerable sovereigns that face tight access to financing or have a record of ratcheting up debt during crises.
• Further, lower crop production may reduce exports or raise imports of food products, adding to external liquidity stress and possibly local inflation. The impact on hydropower output could also be economically significant.
• Highly rated sovereigns have more room to mitigate the effect of adverse weather conditions and their export sectors and economic activity are generally more resilient. However, they may be affected indirectly. For instance, El Nino conditions could influence prices for globally traded food commodities, affecting their inflation and monetary policy decisions.
• Governments can deploy subsidies or transfers to mitigate the effect of rising food prices, but this weighs on fiscal metrics. Moreover, after the COVID-19 pandemic and subsequent periods of high global inflation, many governments have less fiscal headroom.
• Nonetheless, the Food and Agriculture Organization of the United Nations expects global cereal production in 2023 to be slightly above the previous record in 2021. If this bears out, it should provide a buffer against the risk of disruption to output in 2024; and suggests any impact from the El Nino on global food prices in aggregate should be limited.

(Source: Fitch Solutions)

• Panama has been removed from the grey list of financial crime watchdog FATF (The Global Financial Action Task Force). This register includes countries deemed to be doing too little to combat money laundering.
• Panama's first stint on the FATF's so-called grey list, which can impact a country's investment ratings and reputation, was from 2014 to 2016. It was readded in 2019.
• Panama's Deputy Financial Minister Jorge Almengor had told Reuters in June he expected Panama to be excluded from the list this month; after authorities had addressed the requests to boost financial transparency.
• Furthermore, the systematic changes made by the government in the financial sector are solid enough for the country not to rejoin the list in the future, noted the Economy and Finance Minister.
• Almengor had said this was an urgent issue so Panama could reclaim its place as a financial hub. Panama's President Laurentino Cortizo celebrated the decision on social media platform X, formerly Twitter.

(Sources: Reuters & Swiss Info)

• Eurozone inflation will have almost fallen back to the European Central Bank's 2% target in 2025, but economic growth will remain weak and at below 1% through next year, the ECB's quarterly Survey of Professional Forecasters showed on Friday.
• The ECB left interest rates unchanged on Thursday after the steepest set of hikes on record, arguing that inflation was finally back on track towards 2%, even if high energy costs continued to pose an upside risk. Friday's survey, a key input in the bank's policy deliberation, confirmed this outlook, predicting relatively slow but persistent disinflation over the coming two years.
• The survey sees consumer price growth at 2.7% next year, the same figure predicted three months ago but well below the ECB's own 3.2% expectation. The 2025 figures were meanwhile lowered to 2.1% from 2.2% and the longer-term forecast, defined as 2028, remained unchanged at 2.1%.
• The figures are likely to bolster market expectations that eurozone rate hikes are over after ten back-to-back hikes, and may fuel expectations that the ECB will start reversing course around mid-2024. On growth, the survey showed increasing gloom in the outlook though it differed little from the ECB's own staff projections.
• The 2025 GDP growth forecast was cut to 0.9% from 1.1% while 2025 remained unchanged at 1.5%. Unemployment forecasts were barely changed, likely comforting policymakers, as labour market resilience will support consumption and limit the pain caused by the record-high rates.

(Source: Reuters)

• Consumer spending in the United States saw a significant increase in September, driven by higher purchases of motor vehicles and increased travel. This trend is expected to continue into the fourth quarter.
• The rise in consumer spending was accompanied by elevated inflation readings, particularly in services like housing. However, there is a belief that spending will cool off in early 2024 as accumulated pandemic savings are depleted.
• The strong consumer spending contributed to rapid economic growth, but it's unlikely to match last quarter's performance. Savings rates have dropped, and personal income has seen limited growth, which is causing concern about the sustainability of spending.
• Inflation remains a concern, with the Federal Reserve closely monitoring it. The Fed is expected to keep interest rates unchanged due to recent financial market conditions. Despite the inflation worries, some economists believe that U.S. households are financially healthy, with manageable debt levels and solid income.

(Source: Reuters)

• Dolla Financial Service Limited recorded a net profit of $102.47Mn for the quarter that ended September 30, 2023. This represents a 46.1% yoy increase in profitability. Furthermore, for the nine months ending September 2023, profitability also increased to $328.11Mn from $188.05Mn.
• Net interest income for the quarter was up by 51.4% yoy to $248.55Mn. This was driven by increased loan portfolio expansion. Similarly, net interest income for the nine months increased by 69.3% yoy $737.99Mn.
• Operating expenses, including expected credit losses, totalled $155.69Mn, marking a $59.77Mn or 62.3% YoY increase for the quarter ended September. On the same note, operating expenses including expected credit loss were 80.5% higher in the nine months ended September 2023, when compared to the same period of last year. This was primarily due to an increase in staff capacity, regulatory and professional fees and intensified marketing efforts.
• Dolla's stock price has decreased by 11.8% since the start of the calendar year. The stock closed Thursday’s trading session at $2.54 and currently trades at a P/E of 13.4x which is above the Junior Market Financial Sector Average of 13.1x.
• The company recently announced its plans to expand further in the region. The expansion of its operation in other territories is part of its strategy to enlarge the company’s loan portfolio, allowing it to generate income and profit for its shareholders. At the end of September, its loans receivables net of expected credit losses amounted to $2.6Bn, which represents a massive jump of 125%. The company recently struck a deal with real estate brokerage firm Century 21 Heave-Ho Properties Limited to become the preferred financing partner for short-term loans to its clients and agents, covering home purchase fees and incidentals.
• The financing arrangement is an extension of a previous pact signed between the two companies that will see Dolla Financial and its subsidiary Ultra Financier handing over real estate business to the brokerage, including powers of sale for foreclosures and sale of properties used as collateral for loan agreements. The partnership with Century 21 would make Dolla’s fifth partnership in recent times aimed at widening its client base.

(Sources: JSE & NCBCM Research)

• There was a 0.1% increase in output prices for producers in the Mining and Quarrying industry for September 2023, while prices in the Manufacturing industry went up by 1.2%.
• The increase in the Mining and Quarrying industry was mainly a result of the depreciation of the Jamaican dollar against its United States counterpart. The index for the other major group ‘Bauxite Mining & Alumina Processing’, also increased by 0.1%.
• The main contributor to the 1.2% increase in the Manufacturing industry was a 5.9% increase in the index for the major group ‘Refined Petroleum Products’, due mainly to higher fuel prices on the international market. The index for the heaviest-weighted major group within the industry, ‘Food, Beverages & Tobacco’, had a negligible increase. The group ‘Production, Processing & Preserving of Meats, Fish, Vegetables, Oils and Fats’ increased by 0.1% as a result of a 0.2% rise in the sub-group ‘Meat & Meat Products and Fish & Fish Products’. This was due to higher costs of production for processed meat during the review period
• For the period September 2022 – September 2023, the index for the Mining and quarrying industry increased by 6.5%. This was a result of a 6.6% rise in the index for the major group ‘Bauxite Mining & Alumina Processing’. The point-to-point index for the Manufacturing industry rose by 1.9%, due primarily to an increase of 2.7% in the index for the major group ‘Food, Beverages & Tobacco’. However, these movements were tempered by a 4.3% decline in the index for ‘Fabricated Metal Products excl Machinery & Equipment’.
• The Producer Price Index (PPI) is a significant economic indicator that tracks the average fluctuation in selling prices that domestic producers of goods and services experience over time. There was a minor dip in the PPI in June, however, the decision by OPEC+ to curtail oil supply could potentially further escalate producer prices. This is because a reduction in oil supply could drive up costs related to transportation and electricity.

(Source: STATIN)

• Guyana President, Irfaan Ali, wants Venezuela to know that his country will not tolerate what he described as the latter's "unlawful and unfounded claims to more than two-thirds" of its territory. He said Venezuela continues to undermine Guyana's territorial integrity, and warned the move has the potential to incite violence and threaten peace in the Caribbean.
• In a statement on Monday, Ali said his government had taken "careful note" of five questions issued by Venezuela's National Electoral Council, which are to be asked in the December 3^rd national referendum.
• Among those questions, he said, is one that "brazenly seeks the approval of the Venezuelan people of the creation of a new Venezuelan State consisting of Guyana’s Essequibo region, which would be incorporated into the national territory of Venezuela, and the granting of Venezuelan citizenship to the population."
• Ali said that this represents "nothing less" than an annexation of Guyana's territory and it is in "blatant violation of the most fundamental rules of the UN Charter, the OAS Charter and general international law.
• "Such a seizure of Guyana’s territory would constitute the international crime of aggression." He added, "The Government of Guyana categorically rejects any attempt to undermine the territorial integrity of the sovereign State of Guyana."
• Ali noted the idea that the Essequibo region should be "created" into a state with Venezuela is abhorrent. "Further, the government rejects the internationally unlawful act to put forward the ‘granting of citizenship and Venezuelan identity cards in accordance with the Geneva Agreement and international law.'" He also reiterated that no government or person has the right in international law to seize, annexe or take the territory of another country.
• In a statement in direct response to Ali, the Venezuelan government remarked that Ali's comments were offensive. It said his statement was "loaded with profound contempt for the Venezuelan people, its Bolivarian history and its right to express itself democratically, on matters of special national importance.
• "Venezuela insists on urging the Guyanese government to desist from its actions, both unilateral and subordinate to transnational capital and to seriously assume direct negotiations that will allow for a practical and mutually acceptable agreement between the parties, to resolve the territorial controversy, as was agreed to with the UK of Great Britain just before the birth of Guyana as an independent nation.", the statement also noted.

(Source: Trinidad and Tobago Newsday)

• Caribbean water utilities will be able to exchange real-time data on parts and materials through a pilot version of an innovative data-sharing platform launched by the Inter-American Development Bank (IDB). This will allow the participating utilities within this virtual community to expedite mutual aid and ultimately cut costs.
• Seven utilities from across the Caribbean, including the National Water Commission (NWC) in Jamaica, are participating in the data-sharing platform.
• Through Source of Innovation, the IDB has partnered with H2bid, Inc. to provide a one-year pilot version of this groundbreaking platform which is powered by AURSI. The H2bid/AURSI platform is a unique virtual community with a network effect that connects utilities across various sectors, including water, wastewater, gas, and electricity.
• The initiative aims to assist Caribbean water utilities by providing access to replacement parts, promoting the discovery of new technologies, sharing technical information, encouraging best practices exchange, and reducing waste through surplus item redistribution.
• This innovative pilot platform streamlines collaboration among Caribbean water utilities, helping them recover from climate-related disasters and address current supply chain challenges by expediting mutual aid during emergencies to restore service quickly.
• Users will have the opportunity to connect with their peers from other participating utilities through the virtual community. During the pilot phase, the IDB and participating utilities will explore the feasibility of expanding the pilot version to include a pooled procurement programme — a proven method for saving costs through bulk purchases.
• Representatives from the Caribbean Water and Wastewater Association, Caribbean Water & Sewerage Association, and Caribbean Development Bank actively participated in the pilot platform launch event, expressing their organisations' support for the virtual community and their strong desire to see it expand to include more Caribbean water utilities.

(Source: CariCris)

• The interest rate on the most popular U.S. home loan last week jumped to the highest since September 2000, marking its seventh straight weekly increase and driving mortgage applications to a 28-year low, a survey showed on Wednesday.
• The 7.9% average contract rate for a 30-year fixed-rate mortgage during the week ended Oct. 20 was up 20 basis points from the prior week, the Mortgage Bankers Association said.
• "Mortgage activity continued to stall, with applications dipping to the slowest weekly pace since 1995," MBA vice president and deputy chief economist Joel Kan said. "These higher mortgage rates are keeping prospective homebuyers out of the market and continue to suppress refinance activity."
• The cost of borrowing to buy a house has risen even as the Federal Reserve has put its inflation-fighting rate-hike campaign on pause, after lifting its benchmark policy rate from near zero in March 2022 to 5.25-5.50% in July of this year.
• The 30-year fixed rate mortgage is up 81 basis points since then, tracking a similar rise in the yield on the 10-year Treasury note, the main benchmark for longer-term U.S. borrowing rates.

(Source: Reuters)

• Barclays PLC is laying off dozens of staff in its U.S. consumer banking division as part of a global drive to cut costs, according to a source familiar with the situation.
• The redundancies account for about 3% of employees in the bank's U.S. consumer division, said the source, who declined to be identified discussing personnel matters. The staff were informed earlier this week, the person said. "We review our business on a regular basis to ensure we are operating as effectively and efficiently as possible," a spokesperson for Barclays said in a statement. "These decisions are never easy and employees whose roles have been impacted will receive a full range of transition services."
• Barclays on Tuesday said it would embark on a fresh round of restructuring in the coming months, as it looks to reduce costs and drive efficiencies across the bank in a bid to lift profits. The bank's shares nonetheless slid 6% on Tuesday as long-suffering investors in the British bank digested its downbeat outlook for its home market.
• Chief Executive C.S. Venkatakrishnan said the lender will update investors on the areas impacted when Barclays reports full-year results in February.
• The bank is already drawing up plans to cut hundreds of jobs in its domestic retail bank and cut staff in its investment bank, Reuters reported last month. Barclays' consumer, cards and payments business, which houses the U.S. division impacted by the latest job cuts, has been a source of strength for the bank in recent quarters as growth in credit card balances from its $3.8 billion acquisition of retailer Gap Inc's portfolio lifted revenues.
• The outlook for the business looks murkier now, however, with the bank warning on Tuesday that higher unemployment expectations in the U.S. could lead to customers missing payments

(Source: Reuters)