• Cooling Mexican economic activity and inflation data on Monday supported expectations that Latin America's second-largest economy is headed towards a technical recession and fueled bets the central bank will move to keep cutting borrowing costs later this week.
• Battered by a devastating drought last year and falling investor confidence, Mexico's economy shrank 0.2% in January from December and contracted 0.1% from January 2024, national statistics agency INEGI said. The news comes after the economy shrank in the final quarter of last year - its first quarterly GDP slump since the COVID-19 pandemic.
• Analysts have told Reuters that a recession is likely as U.S. President Donald Trump's on-again, off-again tariffs wreak havoc on growth that was already weakening. A first-quarter contraction would mark a technical recession, defined as two straight quarters of negative growth. "We now think a recession is unavoidable," JPMorgan said in an analysis note after Monday's economic activity data.
• JPMorgan said consumer prices were beginning to respond to economic activity's "weak backdrop" and expects the Bank of Mexico to deliver a second consecutive 50 basis-point cut to the benchmark interest rate, taking it to 9%. Inflation in the first half of March came in slightly below market forecasts on Monday, hitting 3.67% on an annual basis, INEGI said, down from 3.74% in the previous month and below the 3.75% expected by economists in a Reuters poll.
• Inflation remains within the Bank of Mexico's 2% to 4% target range, which coupled with weakening economic activity has allowed the bank to lower borrowing costs. "The economy is becoming more sensitive to tighter financial conditions and a less favorable external backdrop," Pantheon Macroeconomics' chief Latin America economist Andres Abadia said in a note to clients.
• Mexico's annual core inflation, which some consider more reliable as it strips out volatile food and energy prices, slowed to 3.56% in mid-March from 3.63% a month earlier. Economists expected 3.57%, according to the Reuters poll. In the 15 days alone, headline consumer prices were up 0.14% whereas core inflation hit 0.24%, both slowing slightly from the previous month. After lowering interest rates by half a percentage point last month, the central bank stated it would consider similar adjustments in the future if inflation kept cooling. "The drop in core services inflation and weak activity seal the deal on a 50-bp cut," Kimberley Sperrfechter of Capital Economics said.

(Source: Reuters)

• New Canadian Prime Minister Mark Carney on Sunday called a snap election for April 28, saying he needed a strong mandate to deal with the threat posed by U.S. President Donald Trump, who "wants to break us so America can own us."
• The comments showed the extent to which relations between the U.S. and Canada, two long-time allies and major trading partners, have deteriorated since Trump imposed tariffs on Canada and threatened to annex it as the 51st state.
• Although the next election was not due until October 20, Carney is hoping to capitalize on a remarkable recovery by his Liberal Party in the polls since January, when Trump began threatening Canada and former Prime Minister Justin Trudeau announced his resignation.
• Upon being sworn in as prime minister on March 14, Carney had said he could work with and respected Trump. On Sunday (March 23), however, he took a more combative approach.
• "We are facing the most significant crisis of our lifetimes because of President Trump's unjustified trade actions and his threats to our sovereignty," Carney told reporters after the Governor General - the personal representative of King Charles, Canada's head of state - approved his request for an election. "Our response must be to build a strong economy and a more secure Canada. President Trump claims that Canada isn't a real country. He wants to break us so America can own us. We will not let that happen."
• The White House did not immediately respond to a request for comment on Carney's remarks. Trump on March 6 delayed a broad 25% tariff on some Canadian goods for 30 days. He has since imposed tariffs on steel and aluminium imports and threatened reciprocal tariffs on additional goods, including Canadian dairy and lumber, on April 2.

(Source: Reuters)

• Markets opened higher on Monday, March 24, powered by gains in U.S. stocks, while U.S. Treasury yields climbed after Bloomberg and The Wall Street Journal reported that President Donald Trump's tariff plan may use a more targeted approach than previously thought, boosting risk appetite. Ahead of President Trump’s next big trade move, his administration invited companies to weigh in on the economic barriers they faced abroad.
• The list of complaints was both sprawling and specific. In hundreds of letters submitted to the administration in recent weeks, producers of uranium, shrimp, T-shirts and steel highlighted the unfair trade treatment they faced, in hopes of bending the president’s trade agenda in their favor. The complaints varied from Brazil’s high tariffs on ethanol and pet food to India’s high levies on almonds and pecans, to Japan’s longstanding barriers to American potatoes.
• Trump has promised to overhaul the global trading system on April 2, when he plans to impose what he is calling “reciprocal tariffs” that will match the levies and other policies that countries impose on American exports. The president has taken to calling this “liberation day,” arguing that it will end years of other countries “ripping us off.”
• The president had floated the idea of also announcing sector-specific tariffs on cars, pharmaceuticals and semiconductors that same day. On Monday, Trump said that he would be announcing tariffs on cars “very shortly,” as well as pharmaceuticals in the “not-too-distant” future.
• That said, Trump himself will ultimately determine the contents of the April 2 announcement. The action aims to shrink a US$1.2Tn global goods trade deficit by raising U.S. tariffs to levels charged by other countries and counteracting their non-tariff trade barriers.

(Sources: Reuters and the New York Times)

• Sagicor Select Funds Limited (SSFunds) has advised that it has filed an application with the Supreme Court of Jamaica on March 17, 2025 seeking an order to convene a meeting of shareholders of the Sagicor Financial Select Fund and the Sagicor Manufacturing and Distribution Select Fund (each “the Fund” and collectively, “the Funds”) to vote on the proposed conversion of the Funds into Unit Trusts pursuant to a court-approved scheme of arrangement.
• The filing of this application follows the Board of SSFunds’ decision on May 8, 2024, to pursue the conversion of the Funds into Unit Trusts registered with the Financial Services Commission (FSC) and governed by the Securities (Collective Investment Scheme) (CIS) Regulations, 2013 (CIS Regulations).
• The proposed conversion seeks to resolve the issue of the SSFunds’ shares consistently trading at a significant discount to their net asset values (NAV) on the Jamaica Stock Exchange (JSE). Simultaneously with the application to the Court, the Company will prepare an application to the Financial Services Commission (“FSC”) to register the two Unit Trusts.
• Should the Court approve the application to convene a meeting of shareholders of each Fund, and the requisite majority of shareholders in each Fund vote in favour of the Resolution to convert the Funds to Unit Trusts, a second Court hearing will be held seeking the sanction of the Court to approve the Scheme. Once the Court grants the Order approving the Scheme and that Order is filed with the Registrar of Companies the Scheme will become effective.
• As at March 19, 2025, Sagicor Select Funds: Manufacturing & Distribution and Financial closed at $0.45 and $0.89, respectively, 21.1% and 27.8% below their respective NAVs.

(Source: JSE)

• Local entrepreneurs are being encouraged to participate in and engage with brokers and buyers during the Outsource2Jamaica 2025 (O2J2025) Conference, slated for the Montego Bay Convention Centre in St. James on April 10.
• The annual event, to be held under the theme ‘Driving Excellence: Talent, Technology and Transformation’, is expected to showcase Jamaica’s immense potential as a hub for business process outsourcing (BPO), knowledge process outsourcing (KPO) and information technology-enabled services (ITES).
• Speaking during a recent Jamaica Information Service (JIS) ‘Think Tank’, Vice President for Business Process Outsourcing (BPO) and Logistics at the Port Authority of Jamaica, Gloria Henry, highlighted the growth opportunities available in the BPO and allied industries for both current participants and newcomers to the sector.
• Ms. Henry noted the positive outcomes resulting from buyers previously engaging with industry service providers in Jamaica and subsequently deciding to establish their centres.
• “We have been able over the years to generate over half a million US dollars per year out of some of these transactions, and close to half a billion dollars in investment has been, so far, outsourced to Jamaica,” she said.
• Ms. Henry acknowledged that “there are a number of entrepreneurs who are looking at the industry, seeing the opportunities and may be a little reluctant to get in”. Consequently, she said the conference “is an opportunity for them to engage with brokers and buyers”.

(Source: JIS)

• The Trump administration on Monday, March 17, 2025, quietly rescinded an order that had blocked a major Dominican sugar producer with political ties to President Trump from shipping sugar to the United States because of allegations of forced labour at the company.
• U.S. Customs and Border Protection modified a “withhold release order” that had been issued in 2022 for raw sugar and sugar products made by the Central Romana Corporation, blocking exports to the United States from the company. The Customs website now lists the order as “inactive.”
• Labour rights groups expressed frustration at the change, saying that Central Romana, whose sugar had been sold in the United States under the Domino brand, had not significantly improved its labour practices.
• A U.S. official, who declined to be named because the person was not authorized to speak publicly, said that the decision to rescind the rule and allow the company to begin exporting had not followed established processes. The official cited Central Romana’s powerful ownership and said that the decision was most likely made at the top levels of U.S. Customs and Border Protection.
• However, Hilton Beckham, an assistant commissioner of public affairs for Customs and Border Protection, confirmed that the order had been modified, saying that the decision followed “documented improvements to labour standards, verified by independent sources.” She declined to disclose those sources, citing confidentiality reasons.
• That said, the Ministry of Industry, Commerce, and MSMEs (MICM) in the Dominican Republic welcomed the decision, whilst the Ministry of Labor highlighted that this move reflects confidence in the Dominican Republic as a key trade partner.
• Minister Víctor Ito Bisonó emphasized that the decision enhances global confidence in the country and aligns with President Luis Abinader’s efforts to promote sustainable and competitive trade. He added that this progress bolsters the nation’s image and expands opportunities for Dominican exports.

(Sources: Dominican Today & The New York Times)

• U.S. President Donald Trump's administration is considering a plan to extend Chevron's, license to pump oil in Venezuela, the Wall Street Journal reported on Thursday, March 19, 2025, citing people familiar with the discussions.
• During a meeting on Wednesday with Chevron CEO Mike Wirth and other industry executives, Trump expressed openness to reversing his administration's recent order that gave the company until early April to wrap up its Venezuela operation, the Journal reported.
• That said, Washington is also weighing a plan to impose tariffs or other financial penalties on countries that buy oil from Venezuela, according to the WSJ report.
• These tariffs are intended to make it harder for China or other countries to establish a base in Venezuela and to fortify Chevron and keep oil flowing to the U.S., the Journal said. It could also force Venezuelan President Nicolas Maduro to the negotiating table, Commerce Secretary Howard Lutnick told Wirth in the meeting, which also included Energy Secretary Chris Wright and Interior Secretary Doug Burgum.
• Maduro and his government have always rejected sanctions by the United States and others, saying they are illegitimate measures that amount to an "economic war" designed to cripple Venezuela. He and his allies have cheered what they say is the country's resilience despite the measures, though they have historically blamed some economic hardships and shortages on sanctions.

(Source: Reuters)

• Slowing economic growth mixed with a bout of renewed inflation risks moving the U.S. from a global overachiever to a drag on the rest of the world as foreign central banks and others confront the spillovers from President Donald Trump's fast-moving effort to rewire international trade.
• With analysts in the U.S. noting the stagflationary direction of the U.S. outlook - weaker output and higher prices - central banks globally are parsing what the fallout may mean for them.
• When the Bank of England held its policy rate steady on Thursday it pointed specifically to Trump's tariff moves as clouding the global outlook. Similar warnings came from the Bank of Japan, which held its policy rate steady and signalled future moves could be shaped by how Trump's plan to blanket the world with new tariffs plays out in practice.
• European Central Bank President Christine Lagarde said on Thursday that U.S. tariff measures and likely European Union retaliation would be a blow to growth and tack perhaps half a percentage point onto inflation in the short-run at least. Swiss National Bank governing board member Petra Tschudin said as the SNB cut its policy rate that "developments abroad continue to represent the main risk" in an economic climate that "has become considerably more uncertain."
• Economists see a likely recession in Canada and Mexico, which depend mightily on exports to the U.S. and have been particularly targeted by Trump, while shifts in global currency and capital flows and U.S. foreign spending are already creating sets of winners and losers.
• Trump has said he will follow through next month on twice-delayed plans to impose 25% levies on goods from Mexico and Canada despite a regional trade agreement negotiated in his first term and announce a tariff "number" for other countries based on taxes they impose on U.S. goods.

(Source: Reuters)

• The Bank of England looks set to keep interest rates on hold on Thursday as it awaits the impact on the economy of U.S. President Donald Trump's trade tariff onslaught and of the British government's imminent tax hike for employers.
• With UK inflation stuck firmly above its 2.0% target, the BoE has cut borrowing costs by less than the European Central Bank and the U.S. Federal Reserve since last summer, contributing to the country's sluggish growth rate.
• When it trimmed its benchmark Bank Rate to 4.5% in February, the BoE stressed it would move gradually and carefully with further cuts given the uncertainties hanging over the economy.
• Since then, those uncertainties have only mounted in large part due to Trump gearing up to announce import tariffs for a host of trading partners of the United States on April 2, muddying the outlook for growth and inflation around the world.
• Also on the Monetary Policy Committee's radar is finance minister Rachel Reeves' budget update speech next Wednesday in which she is expected to announce cuts to public spending plans, a big component of Britain's economic growth outlook.
• Last month the BoE said it expected inflation to reach 3.7% later this year, up from January's 3%. Some economists say it will hit 4%, testing the BoE's assumption that there is little threat to longer-term price pressures through wage demands.

(Source: Reuters)

• Junior market production and media company Limners and Bards Limited (The Lab) reported a 17.6% profit decline for its first quarter of the 2025 Financial Year (Q1 2025) as higher expenses outshone revenue growth.
• Revenues grew by 30.4% to 286.13Mn, driven by contributions from its core segments: Media ($142.50Mn), Production ($101.00Mn), and Agency ($42.60Mn). However, the bulk of the revenue growth came from its lower-margin Production and media segment.
• Direct expenses outpaced revenue growth, rising 42.3% to $185.58Mn. This led to a 13.0% increase in gross profits – albeit at a lower gross margin of 35.1% relative to 40.6% in Q1 2024.
• Total operating expenses also increased by 12.9% to $78.74Mn, driven by selling and distribution costs (S&D: +11.1%) to 76.94Mn. The increase in S&D was influenced by higher staff costs (+9.2%) following strategic investments in talent – including a Chief Business Development Officer – and enhanced client service support to drive new business acquisitions and strengthen the execution of key initiatives. 
• The faster expense growth as well as a non-recurrence of impairment recoveries on financial assets totalling $6.02Mn in Q1 2024, resulted in a 9.8% decline in operating profits to $23.24Mn, with the operating margin falling from 11.7% to 8.1%. 
• While the Lab benefited from a four-fold increase in finance income to $1.96Mn, taxation expenses further pulled net profits down. Having listed in July 26, 2019, the company spent more than 5 years on the Junior Market, meaning its tax rate increased from 0% to 12.5%, effective July 31, 2024.
• This recent result reflects a broader earnings decline for the company with annual profits of $82.95Mn in FY2024, well below its $155.55Mn peak in FY21. To address the decline, The LAB is working to strengthen its position in the global content market by expanding its client base, securing industry recognition, and aligning its content strategy with the growing demand for diverse, high-quality storytelling, especially on major streaming platforms like Netflix.
• At market close on March 19, 2025, The Lab’s stock is down 5.5% year-to-date and trading at $1.20 per share. Its P/E of 14.10x is below the Junior Market Average of 35.97x.

(Source: JSE & NCBCM Research)