• On May 4, policymakers at the Banco Central do Brasil (BCB) announced an increase in the benchmark Selic interest rate to 12.75%, from 11.75% previously. This was in line with Fitch Solutions’ view and consensus expectations that brought total hikes in the BCB’s current cycle to 1,075 basis points (bps) since March 2021, one of the most aggressive tightening cycles globally. 
• The BCB stated that it ‘foresees as likely an extension of the cycle, with an adjustment of lower magnitude’. This aligns with the Agency’s view that the bank will make one additional 50bps rate hike this year, in a shift from the central bank’s previous position that it would end its tightening cycle with the May meeting. 
• Notably, this view is underpinned by persistent, broad-based inflationary pressures, which have been exacerbated by higher commodity prices after the Russian invasion of Ukraine and a slight recent weakness in the currency. In March 2022, inflation accelerated above consensus expectations to 11.3% y-o-y (1.6% m-o-m), the highest level since 2003, driven higher by food and fuel prices alongside strong core inflation. 
• Overall, it is expected the BCB will hike by an additional 50bps at its next meeting on June 15, bringing the rate to 13.25%, which is in line with Bloomberg consensus expectations of 13.30%., then hold through the rest of 2022. That said, risks are poised to the upside, with the bank leaving the door open to extending its rate hiking cycle further if inflation continues to surprise to the upside, inflation expectations trend higher or if the Brazilian real were to significantly weaken.

(Source: Fitch Solutions)

• New claims for U.S. unemployment benefits increased to a more than two-month high last week but remained at a level consistent with tightening labour market conditions and further wage gains that could keep inflation hot for a while. 
• The report from the Labour Department on Thursday also showed the number of Americans collecting state unemployment checks was the smallest in more than 52 years towards the end of April. Economists brushed off last week's increase in initial claims, arguing that the data are volatile around moving holidays like Easter, Passover, and school spring breaks. 
• Initial claims for state unemployment benefits rose 19,000 to a seasonally adjusted 200,000 for the week ended April 30, the highest since mid-February. Economists polled by Reuters had forecast 182,000 applications for the latest week. Claims at 200,000 are viewed as consistent with strong demand for workers. They have declined from a record high of 6.137 million in early April 2020. 
• Further, government data this week showed there were a record 11.5 million job openings on the last day of March, which widened the jobs-workers gap to a record 3.4% of the labour force from 3.1% in February. The labour market imbalance is forcing employers to increase wages, contributing to soaring inflation. 
• Rising labour costs showed that worker productivity plummeted at its sharpest pace in more than 74 years in the first quarter, suggesting that the Fed cannot, for now, rely on workers being more productive to rein in inflation.

(Source: Reuters)

• The Bank of England raised interest rates to their highest since 2009 at 1% on Thursday to counter inflation now heading above 10%, even as it sent a warning that Britain risks falling into recession. 
• The BoE's nine rate-setters voted 6-3 for the quarter-point rise from 0.75%. But Catherine Mann, Jonathan Haskel and Michael Saunders called for a bigger increase to 1.25% to stamp out the risk of the inflation surge getting embedded in the economy. 
• Central banks around the world are scrambling to cope with the surge in inflation that they once described as transitory when it began with the reopening of the global economy before Russia's invasion of Ukraine sent energy prices spiralling. 
• The BoE said it was also worried about the impact of China's COVID-19 lockdown policies which threaten to hit supply chains again and add to the inflation pressure. 
• The BoE's move represented its fourth consecutive rate hike since December - the fastest increase in borrowing costs in 25 years - and it hardened its message about further increases, despite its worries about a sharp economic slowdown. 
• The BoE said most policymakers believed "some degree of further tightening in monetary policy may still be appropriate in the coming months".

(Source: Reuters)

• iCreate reported a net profit of $10.11 Mn for its first quarter ending March 31, 2022, which represents a 428.7% increase relative to the prior year. 
• The rebound was supported by a jump in revenues as revenues increased by $37.97Mn or 451.1% to close the quarter at $46.4Mn. This revenue outturn was also 41.3% more than the total revenues for the 2021 financial year ($32.83Mn). This was however tempered by an associated rise in direct costs (1220.9%). 
• The company’s core business, the Institute/Education division benefitted from a shift in strategy as it transitioned from a business to customer model to a business to business model. As a result, the group would have secured long-term corporate clients which will help to drive future revenues. The company now has three major long-term corporate training partnerships. 
• Going forward, management expects that the company will see continued growth for the rest of the financial year, supported by a downward trend in receivables when payments from corporate clients begin to flow in Q2, especially considering the fact that they would have trained a record number of professionals in digital skills. 
• ICreate’s stock price has increased by 434.3% since the start of the calendar year. The stock closed Wednesday’s trading session at $4.15 and currently trades at a P/B of 41.7x.

(Sources: Company’s Financials & NCBCM)

• Seprod Limited announced that it has reached an agreement to acquire A.S. Bryden & Sons Holdings (“A.S. Bryden”), a Trinidad and Tobago-based consumer products distributor, to create the leading integrated manufacturing and distribution group in the Caribbean. 
• Together Seprod and A.S. Bryden, with a team of close to 3,000 employees, will serve the world’s leading food, pharmaceutical, premium beverage, hardware and industrial companies, with an expanded portfolio of their own manufactured brands. Combined annual revenues are projected to be in excess of US$500 million. 
• S. Bryden will continue to operate as an independent, standalone company and its subsidiaries: A.S. Bryden & Sons (Trinidad) Limited, Bryden pi Limited, and F.T. Farfan Limited, will continue to be managed by their existing executive teams. Richard Pandohie, the Chief Executive Officer of Seprod, will serve as interim Group Chief Executive Officer of A.S. Bryden.  
• Seprod’s stock price would have decreased by -6.6% since the start of the calendar year. This news is expected to put upward pressure on the stock price as investors will try to secure a position in the company to capture expected earnings growth. 
• Subject to regulatory approvals and other customary closing conditions, the transaction is expected to be completed by May 31, 2022.

(Sources: JIS News & NCBCM)

• The Government of Dominica is implementing measures to keep fuel prices under control as the global price of oil continues to rise. Taking into account the current global market prices, the Government has decided to subsidize the cost of petroleum to reduce the impact on residents and avert a possible slow-down in economic growth prospects. 
• Due to the proposed sharp increase in prices, Cabinet has taken a decision to remove the customs service charge on gasoline and diesel with immediate effect. In addition, Cabinet is granting subsidies equivalent to 60 cents per gallon on the importation of gasoline and 21 cents per gallon on the importation of diesel until the retail price of each product returns to below $15.00 per gallon. 
• The implementation of the measures will result in revenue loss to the state. However, the Government of Dominica remains committed to actions, which will protect consumers from escalating world fuel prices, despite the adverse effects of the COVID-19 pandemic on the government’s revenue.
• Consumers are urged to embrace lifestyle changes to better adapt as global oil prices continue to rise. Taxi operators and bus drivers are encouraged to use established procedures in dealing with the impact of the escalating prices on their businesses, and not levy increases in fares on commuters without the approval of the appropriate authority.

(Source: Dominica News Online)

• Prime Minister Dr. Ralph Gonsalves says St. Vincent and the Grenadines has obtained permission from Venezuela to “borrow back” US$9.00Mn paid on loans owed to theALBA Bank. 
• The money had been held in an escrow account at the Eastern Caribbean Central Bank(ECCB), as sanctions imposed on Venezuela by the United States prevented its transfer to Caracas. The Prime minister noted that the money was paid there to reduce the issue of any challenges arising with the sanctions. 
• Two proposals were put forward to the Alba Bank which have been accepted, one of which was to utilise US$4.00Mn to procure vessels for St Vincent’s fishing industry. This arrangement would be made with particular fishers to train them. These are bigger vessels at a higher level requiring other kinds of training and building a fleet. The other US$5.00Mn is being earmarked for the repair of Little Tokyo, the bus terminal in Kingstown that services the east of the country. 
• Notably, Venezuela cancelled Kingstown’s debt under the PetroCaribe oil initiative and agreed to cancel 50% of the debt owed by the other members of the Organisation of Eastern Caribbean States. This would in turn provide an improvement in the sovereign’s balance sheet.

(Sources: Caribbean News Weekly & NCBCM)

• The Federal Reserve on Wednesday raised its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years, and the U.S. central bank's chief made a direct appeal to Americans struggling with high inflation to hang tough while officials take the hard measures to bring it under control. 
• In a widely expected move, the Fed set its target federal funds rate to a range between 0.75% and 1% in a unanimous decision, with further rises in borrowing costs of perhaps similar magnitude likely to follow. Fed Chair Jerome Powell, however, told reporters that a rate increase of as much as three-quarters of a percentage point is not something officials are "actively considering." 
• The Fed also said starting next month, it would reduce the roughly $9 trillion stash of assets accumulated during the coronavirus pandemic in another lever to bring inflation under control. 
• Powell, speaking in a news conference after the end of the Fed's latest two-day policy meeting, said he and his colleagues were determined to restore price stability but that doing so would entail higher borrowing costs, including for things like mortgages and car loans. 
• Nonetheless, the Fed said the economy is continuing to perform well, and Powell said it is well-positioned to withstand the coming rate hikes, which are likely to be of a magnitude more like the one announced on Wednesday. 
• Despite a drop in GDP over the first three months of this year, "household spending and business fixed investment remain strong. Job gains have been robust," the central bank's Federal Open Market Committee said in its policy statement.

(Source: CNBC News)

•  The European Union proposed its toughest sanctions yet against Russia on Wednesday, including a phased oil embargo, as Moscow pressed an offensive in eastern Ukraine and close Russian ally, Belarus announced large-scale army drills. 
• Nearly 10 weeks into a war that has killed thousands of people and flattened Ukrainian cities, Russia was intensifying its assault, Ukraine's defence ministry said, with attacks reported on railway stations used to transport Western arms. 
• A new convoy of buses began evacuating more civilians from the ravaged southeastern port city of Mariupol, which has seen the heaviest fighting of the war so far. Moscow pledged to halt some military operations this week to allow more evacuations. 
• Piling pressure on Russia's already battered $1.8 trillion economy, Brussels proposed phasing out imports of Russian crude oil within six months and refined products by the end of this year. 
• The plan, if agreed by all 27 EU governments, would follow U.S. and British oil bans and be a watershed for the world's largest trading bloc, which remains dependent on Russian energy and must find alternative supplies.

(Source: Reuters)

• The Jamaica Stock Exchange (JSE) has entered into a partnership with the Ghana Stock Exchange (GSE), which will see the capital markets of Jamaica and Ghana expanding their products and services to investors in both countries. 
• This is being facilitated under a Memorandum of Understanding (MOU) of Mutual Recognition, which was signed by representatives of both entities during a special Bell Ringing ceremony on Monday (May 2) at the JSE’s Harbour Street office in Kingston.
• This partnership is beneficial to both parties as it will strengthen linkages between both countries, provide investors with more options for diversification, and it will also strengthen investor participation among both exchanges. 
• Managing Director of the JSE, Dr. Marlene Street Forrest highlighted that there are certain commonalities that make the alliance with Ghana ideal, pointing out, for example, that like Jamaica, Ghana has a growing, young, educated middle-class population that has a high demand for goods and services. 
• Additionally, she expects that over the next several years’ companies globally will set up industries and companies in Africa and the Caribbean, and as such the stock exchange will be perfectly poised to benefit from such an expansion.

(Sources: JIS News and NCBCM)