• Federal Reserve Governor Christopher Waller said Wednesday he’s open to reducing the level of interest rate increases soon, so long as the economic data cooperates.
• The rate-setting Federal Open Market Committee is set to meet Dec. 13-14. Market expectations are running high that policymakers will approve another rate hike, but this time opting for a 0.5 percentage point, or 50 basis point, move. That would come after approving four consecutive 0.75 percentage point increases.
• “Looking toward the FOMC’s December meeting, the data of the past few weeks have made me more comfortable considering stepping down to a 50-basis-point hike,” Waller said in prepared remarks for an event in Phoenix. “But I won’t be making a judgment about that until I see more data, including the next PCE inflation report and the next jobs report.” A basis point equals 0.01 percentage point.
• Investors have grown optimistic that a lower-than-expected increase in October’s consumer price index reading is indicative that inflation is cooling. Headline CPI increased 0.4% for the month and 7.7% from a year ago, while the core reading excluding food and energy rose 0.3% and 6.3%, respectively. All the readings were lower than market estimates.

(Source: CNBC)

• The number of Americans filing new claims for unemployment benefits fell last week, showing widespread layoffs remain low despite a surge in technology-sector job cuts that has raised fears of an imminent recession.
• The weekly jobless claims report from the Labor Department on Thursday, the most timely data on the economy's health, suggested the labor market remained tight. That, together with solid consumer spending, keeps the Federal Reserve on track to continue raising interest rates, though at a slower pace amid signs inflation was starting to subside.
• Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 222,000 for the week ended Nov. 12. Economists polled by Reuters had forecast 225,000 claims for the latest week.
• There has been an increase in layoffs in the technology sector, with Twitter, Amazon (AMZN.O) and Meta (META.O), the parent of Facebook, announcing thousands of job cuts this month. Companies in interest-rate sensitive sectors like housing and finance are also letting workers go.
• The layoffs have so far not been evident in official data. Unadjusted claims dropped 6,101 to 199,603 last week. Economists say businesses outside the technology and housing sectors are hoarding workers after difficulties finding labor in the aftermath of the COVID-19 pandemic. With 1.9 job openings for every unemployed person in September, some of the workers being laid off are probably finding new employment quickly.

(Source: Reuters)

• For October 2022, the All-Jamaica Consumer Price Index (CPI) increased by 1.5%, the second-highest increase for 2022. This contributed to a point-to-point inflation rate of 9.9% for October, a slight jump relative to September’s point-to-point inflation figure of 9.3%.
• For October, the rise in monthly inflation was largely driven by an increase in the ‘Housing, Water, Electricity, Gas and Other Fuels’ (+3.4%) and Food and Non-Alcoholic Beverages’ (+2.0 %) divisions. These increases were due mainly to higher rates for electricity, water, and sewage, as well as higher costs for agricultural products.
• Though there was an uptick in the point-to-point outturn in October, the current rate of 9.9% is keeping with expectations, as the BOJ noted that inflation was projected to stabilize in the range of 9.0% to 11.0% for the remainder of 2022. 
• On November 18, 2022, the BOJ will host its monetary policy meeting in which it is expected to sustain its hawkish stance.  Given the increase in inflation for October and the recent 75bps Fed Fund rate hike it is expected that the BOJ will raise rates by another 50 bps. This increase would bring the policy rate to 7.00%, which would be consistent with Fitch’s forecast.

(Source: Statin and NCBCM Research)

• The Government of Jamaica (GOJ) will be increasing its budgetary spending by approximately $60Bn during the current 2022/23 fiscal year.
• Clarke explained that the Supplementary Budget reflects amounts provided to cushion the impact of the ongoing Ukraine-Russia conflict on vulnerable Jamaicans. The increase resulted in a proposed revised budget of $972.0Bn up from the previously approved budget of $912Bn for the 2022/23 fiscal year.
• Certain ministries are slated to receive additional allocation as a result of the increased budget. This includes $5.1Bn to the Ministry of Economic Growth and Job Creation; $3.6Bn to the Ministry of Health and Wellness to support the payment of arrears for goods and services and procurement of drugs and medical supplies; and $6Bn to the Ministry of National Security, with $1.5Bn for the Jamaica Defence Force (JDF), $3.3Bn for the Jamaica Constabulary Force (JCF), and $862Mn for the Department of Correctional Services (DCS).
• The $60Bn in additional expenditure will be financed primarily through an expected $65.5-Bn increase in revenue flows. At the end of September 2022, total revenues were $40.4Bn above budget, including $35Bn from tax revenue.
• Clarke said this improved performance has been factored into the current economic forecast, which now anticipates total revenue flows of $815.5Bn for the current 2022/23 fiscal year.

 (Source: JIS News)

• Peru's economy expanded by 1.66% in September a slight dip from an increase of 1.68% in August.
• The national statistics institute (INEI) said growth in the world's No. 2 copper producer was driven by most sectors of the economy in September, pointing to gains in construction, transportation, hotels and restaurants, commerce, agriculture, power utilities and other services.
• By contrast, mining, finance, telecommunications, manufacturing and fishing were among the sectors where activity slipped, resulting in a marginal decline. The latest figures meant that during the first nine months of this year, the Peruvian economy expanded by 2.90%, the institute said.

(Source: Reuters)

• Economic activity in Brazil resumed expansion in September, though below expectations, still ending the quarter with positive data, according to information provided by the Central Bank.
• The Brazil IBC-Br economic activity index, a leading indicator of gross domestic product, rose a seasonally adjusted 0.05% in September from the month before, less than the 0.20% increase expected in a Reuters poll with economists. Nevertheless, the rise was enough to guarantee a seasonally adjusted 1.36% expansion for the economy in the third quarter, according to central bank figures.
• This would be an increase from the estimated 1.2% in Q2 2022. However, economists were expecting a slowdown in Latin America's largest economy from the second half, owing to the central bank's aggressive monetary policy cycle to tame inflation.
• Still, the government's official expectation is for the economy to rise by 2.7% this year, driven by higher private investment, resilient service activity and an improved job market.

(Source: Reuters)

• China's economy suffered a broad slowdown in October as factory output grew more slowly than expected and retail sales fell for the first time in five months, underscoring faltering demand at home and abroad.
• The world's second-largest economy is facing a series of headwinds including protracted COVID-19 curbs, global recession risks and a property downturn. In a sign of persistent weakness in the sector, data on Tuesday also showed property investment falling at its fastest pace since early 2020 in October.
• The downbeat data poses a challenge for Chinese policymakers as they steer the $17 trillion dollar economy through choppy waters, following recent moves to ease some COVID curbs and give financial support to the struggling property sector.
• "October activity growth broadly slowed and missed market expectations, pointing to a weak start to Q4 as a worsening COVID situation, prolonged property downturn and slower export growth more than offset continued policy stimulus," analysts at Goldman Sachs said in a note.
• Industrial output rose 5.0% in October from a year earlier, missing expectations for a 5.2% gain in a Reuters poll and slowing from the 6.3% growth seen in September, data from the National Bureau of Statistics (NBS) showed on Tuesday.
• Retail sales, a gauge of consumption, fell for the first time since May, when Shanghai was under a city-wide lockdown. Sales dropped 0.5%, against expectations for a 1.0% rise and compared with a 2.5% gain in September.
• COVID outbreaks widened across the country in October, disrupting the pandemic-sensitive services sector, including the restaurant industry.
• In response to the weak data, investment bank JPMorgan revised down its year-on-year GDP forecast for China in the fourth quarter to 2.7% from a prior 3.4%, while Citi also trimmed to 3.7% from 4.6% previously.

(Source: Reuters)

• Europe's banks risk a significant hit to their profits if house prices across the region begin to slide, regulators and rating agencies have warned.
• While banks' robust balance sheets mean declining house prices are unlikely to pose a systemic risk, the scale of lenders' exposure to the property sector means they could face a hit to earnings, S&P Global Ratings said on Tuesday.
• Home loans typically account for between 30% and 50% of European banks' total customer loans, the rating agency said, adding more cash would likely have to be set aside by lenders for potential defaults as economic conditions worsen.
• “Rising credit risk in mortgage portfolios will lead to a commensurate rise in bank provisioning [for defaults], and a direct hit to their earnings prospects," the agency said.
• S&P's remarks echo concerns raised last week by the European Banking Authority (EBA). The regulator said European Union banks have reported more than 4.1 trillion euros ($4.3 trillion) of loans and advances collateralised by residential property, roughly a third of all loans to households and non-financial firms.

(Source: Reuters)

• The Government of Jamaica (GOJ) will be increasing its budgetary spending by approximately $60Bn during the current 2022/23 fiscal year.
• Clarke explained that the Supplementary Budget reflects amounts provided to cushion the impact of the ongoing Ukraine-Russia conflict on vulnerable Jamaicans. The increase resulted in a proposed revised budget of $972.0Bn up from the previously approved budget of $912Bn for the 2022/23 fiscal year.
• Certain ministries are slated to receive additional allocation as a result of the increased budget. This includes $5.1Bn to the Ministry of Economic Growth and Job Creation; $3.6Bn to the Ministry of Health and Wellness to support the payment of arrears for goods and services and procurement of drugs and medical supplies; and $6Bn to the Ministry of National Security, with $1.5Bn for the Jamaica Defence Force (JDF), $3.3Bn for the Jamaica Constabulary Force (JCF), and $862Mn for the Department of Correctional Services (DCS).
• The $60Bn in additional expenditure will be financed primarily through an expected $65.5-Bn increase in revenue flows. At the end of September 2022, total revenues were $40.4Bn above budget, including $35Bn from tax revenue.
• Clarke said this improved performance has been factored into the current economic forecast, which now anticipates total revenue flows of $815.5Bn for the current 2022/23 fiscal year.

(Source: JIS News)

• Fitch revised its 2022 real GDP growth forecast for Mexico up from 2.0% to 2.7%, following a surprisingly robust Q3 2022 growth print. Growth in Q3 came in at 4.2% y-o-y (1.0% q-o-q in seasonally-adjusted terms), compared to a Bloomberg consensus of 3.3%. 
• With this print, the Mexican economy has now expanded 2.7% through the first three quarters compared to the same period in 2021. The outperformance was driven by resilient private consumption, despite high inflation, as well as strong exports. Goods exports hit an all-time high of USD52.3Bn in September, reflecting the strength of the manufacturing sector and demand from the US, which historically receives roughly 80% of Mexican exports.
• However, growth is expected to slow in Q4 2022 but remain robust at 2.9% as US demand remains solid. Inflation is anticipated to cool while private demand will be boosted by remittances, modest unemployment, and year-end sales.
• Growth will slow more sharply in 2023, to 1.0%, due to weaker demand from the US and elevated interest rates. The Agency forecasted growth in the US to slow from 1.6% in 2022 to 0.3% in 2023 as the US Federal Reserve tightens monetary policy, with the economy entering a minor recession in H2 2022. This will weigh heavily on Mexico’s manufacturing sector, which is highly reliant on US demand, and weaken remittance flows, undercutting private demand.

(Source: Fitch Solutions)