•  Oil prices rose on Tuesday on concerns supplies could become tight due to Ukraine-Russia tensions, threats to infrastructure in the United Arab Emirates and OPEC+ struggling to hit its targeted monthly output increase. 
• Analysts noted that oil price rise came despite a drop in equities markets and the possibility of an interest rate hike by the U.S. Federal Reserve on Wednesday. Brent futures rose $1.14, or 1.3%, to $87.41 per barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.21, or 1.5%, to $84.52/b. 
• "The oil complex is advancing on continued supply tightness and geopolitical risk, but the decline in equities and strong dollar are bearish," Jim Ritterbusch, president of energy advisory firm Ritterbusch and Associates, said in a note. 
• The United States is in talks with major energy-producing countries and companies around the world over a potential diversion of supplies to Europe if Russia invades Ukraine, senior Biden administration officials said. 
• Also fueling supply concerns is the difficulty encountered by OPEC+, which comprises the Organization of the Petroleum Exporting Countries along with Russia and other producers, with efforts to hit its targeted monthly output increase of 400,000 barrels per day beginning February. 

 (Source: Reuters)

• Minister of Agriculture and Fisheries, Hon. Pearnel Charles Jr. says Jamaica’s food security is a top priority for the Government. He further highlighted that there is global demand for Jamaican produce, adding that the Government is seeking to increase local production of several crops, particularly onion. 
• The Ministry has set a target of increasing onion production from 20% to 70% to meet local demand. Additionally, there are other crops that the government will focus on in order to reduce its import bills such as Ginger and Potatoes. 
• According to the Minister, the “first order is that Jamaica should be able to feed itself, feed its tourists, and then go out and stretch across the world,” Mr. Charles Jr said. He further noted that agriculture is a critical component of the country’s economic recovery, urging Jamaicans to take advantage of emerging opportunities in the sector. 
• Food security has a positive impact on economic growth through poverty reduction, increased total employment and an improvement in life expectancy. This will therefore enhance and support Jamaica’s economic recovery in 2022.

(Sources: JIS News & NCBCM Research)

• In 2022, every major regional central bank across Latin America is expected to continue the rate hiking cycles that began in 2021. In response to elevated inflation, this week’s data prints and monetary policy decisions from Brazil and Mexico will shed more light on the likely pace and magnitude of the coming rate hikes across the region. 
• Brazil’s inflation is likely to decelerate in January slightly from the 10.4% y-o-y (0.8% m-o-m) pace seen in December 2021, though the rate of price growth is likely to remain above 10.0% in January and much of H1 2022. Fitch forecasts that Banco Central do Brazil (BCB) will hike its benchmark interest rate to 10.75% in Q1 2022, holding it through the end of the year, but January’s inflation print could pose risks to the upside of this forecast. 
• Mexico’s inflation weakened slightly in the second half of December, to 7.26% y-o-y (0.01% m-o-m). It is expected that price growth will continue to decelerate towards 7.00% in the first half of January. If inflation surprises to the upside, it will put additional pressure on the Bank of Mexico (Banxico) to potentially step up its rate hiking cycle. The Agency projects Banxico will hike from 5.50% currently to 6.50% at end-2022. 
• Given the contractionary activity in October (-0.7% y-o-y), only a slight recovery in economic activity is expected in November, though the overall economy will remain relatively weak. Fitch estimated a 5.6% growth in Mexico in 2021, decelerating to 2.8% in 2022.

 (Source: Fitch Solutions)

• The US-based Center for Disease Control and Prevention (CDC) has added Saint Lucia and 22 other countries to its highest warning Level 4 list, making them countries to avoid visiting because of rising cases of COVID-19. The CDC advises that Level 4 countries should be avoided, and that persons who insist on traveling to those countries must be fully vaccinated. This development will likely deter short-term travel and undermine the recovery in the country’s tourism sector. 
• The arrival of the Omicron variant has increased the perceived risk of travel to several countries. Many countries paused travel from several African countries after the Omicron variant was discovered, resulting in damaging effects to the tourism sector in a dozen nations in the region. 
• Heavily tourism-dependent Saint Lucia and other Caribbean nations, added to the “No Go” list for American travellers, are doing their best to keep cruise ships and flights coming, while implementing tough safety standards, including medical declarations covering COVID conditions of all passengers and crew, 24-hours before arrival. 
• Ships have been prevented from entering and docking in Port Castries, where there are known cases of unacceptable levels of Covid infections on board. However, while acknowledging that such news is “bad for the industry”, the cruise lines and Caribbean tourism officials have been cooperating to their mutual benefits. The number of cruise ships calling into Saint Lucia continues unabated since the Level 4 travel warnings by the CDC.

 (Sources: St. Lucia News Online & NCBCM Research)

• The Bank of Canada (BoC) is expected to begin raising its benchmark interest rate from 0.25% currently, in Q1 2022 as the central bank unwinds stimulus implemented during the Covid-19 pandemic and inflation remains above target. 
• In 2021, the BoC held at 0.25% throughout the year, but wound down its asset-purchasing programme in October, in contrast with the ongoing quantitative easing conducted by the US Federal Reserve (Fed), the European Central Bank and the Bank of Japan. 
• In December 2021, seasonally adjusted inflation rose to 4.8% y-o-y, a multi-decade high. While Fitch forecast inflation will slow throughout 2022 and end the year at 2.3% as supply chain disruptions easeand commodity prices fall, the central bank will likely hike in H1 2022 to help contain inflation expectations. 
• The agency forecasts that the BoC will hike to 1.00% by end-2022 and 1.50% by end-2023, a more hawkish view from previous forecasts of a single 25 bps hike each year. 
• Risks to Fitch’s view are weighted to the upside, particularly if the US Federal Reserve raises the fed funds rate at a faster pace than is currently expected or inflationary pressures persist throughout 2022. 

(Source: Fitch Solutions)

• There is "a great deal of uncertainty" over how long inflation will remain well above the European Central Bank's target of around 2%, ECB Governing Council member Robert Holzmann said in an interview with newspaper Die Presse that was published on Sunday. 
• The ECB has long held the view that inflation will decline this year from its current record high, an expectation its President Christine Lagarde repeatedon Friday. 
• Eurozone inflation hit 5% in December, more than twice the ECB's target, but the bank sees it back below 2% by the fourth quarter. "It is not yet ruled out that that will happen. However, we also do not know whether inflation will stay at a higher level after all," Holzmann, who is governor of the Austrian National Bank, told Die Presse. 
• Second-round effects like wage increases would be decisive, he added and, like Lagarde, he said that for now there was no sign of a price-wage spiral, but much would depend on wage negotiations this year. 
• "Fundamentally there is, therefore, the danger of a wage-price spiral. I believe, however, that labour and employer representatives are acting very rationally and thoughtfully here," Holzmann said.

 (Source: Reuters)

• The competitiveness of a tourism destination requires an effective human capital management plan, where the workforce becomes the primary focus as stated by Jamaica’s Minister of Tourism, Edmund Bartlett. 
• Against this background, the Tourism Ministry has established the Jamaica Centre of Tourism Innovation (JCTI) as the primary platform to build a quality tourism workforce that can access attractive jobs that offer decent work, social protection, and upward social mobility. 
• This process starts from secondary schools where the Tourism Enhancement Fund (TEF) is collaborating with the Ministry of Education and Youth on a training and certification programme for tertiary and secondary-school students as part of Government’s Human Capital Development strategy to ensure the sustainable development of tourism 
• The JCTI also focuses on offering middle management certification programmes covering Certified Food and Beverage Executive (CFBE), Certified Hospitality Housekeeping Executive (CHHE), Certified Hospitality Trainer (CHT), and Certified Hotel Concierge (CHC). 
• These initiatives under the JCTI will aim to increase service quality in the tourism sector which will add to the overall attractiveness of Jamaica’s tourism product.

(Sources: Cointelegraph.com)

• With global oil prices now at the highest level in seven years, Guyana’s prospects of earning more money from its next oil lift is greater than ever before. 
• At end of Tuesday, the cost for Brent – the benchmark Guyana uses to sell its crude – stood at approximately US$86 per barrel. Should this remain the case when the country sells its ninth one-million-barrels of oil in the coming weeks, the sale could rake in as much as US$86 million, up from the US$73.8 million received from the eighth oil lift in November 2021. 
• Given that the oil and gas sector accounts for more than 17% of total GDP, it will be one of the factors driving the projected 48.7% economic growth for 2022. In the coming years, Guyana is looking to position itself as a key producer with the capacity to cushion some of the supply shortfalls on the global market. The nation remains poised to become a major supplier within the global oil market, at least for the next 100 years.

(Sources: Guyana Chronicles & NCBCM Research)

• After more than four years of negotiating with bondholders on how to reduce its debt load, Puerto Rico’s record municipal bankruptcy is coming to an end. 
• The federal judge overseeing the bankruptcy case on Tuesday approved a debt restructuring plan that’s seen as the last major hurdle in order to exit court protection. It shrinks $22 billion of bonds down to $7.4 billion and established a reserve trust to fund the island’s broke pension system. 
• While the bankruptcy process cut Puerto Rico’s annual bond payments down to $1.15 billion, it’s not a cure for its underlying issues, including a shrinking population and weak infrastructure. And the government still needs to come up with $3.4 billion a year to cover all its debt and pension benefits costs. 
• However, exiting bankruptcy will allow the island to move beyond default, begin repaying bondholders and creditors, focus on growing its economy and rehabilitate a weak electrical grid that suffers from chronic outages. Additionally, the US commonwealth will need to restore bondholder confidence that the island can balance its budget without using borrowed money.

(Sources: Bloomberg & NCBCM Research)

• The number of Americans filing new claims for unemployment benefits jumped to a three-month high last week, likely as a winter wave of COVID-19 infections disrupted business activity, which could weigh on job growth in January. 
• The third straight weekly increase in jobless claims reported by the Labour Department on Thursday was also influenced by unfavourable seasonal factors after the holidays. But coronavirus cases, driven by the Omicron variant, are subsiding and the seasonal factors, the model used by the government to iron out seasonal fluctuations in the data, are seen normalising soon, suggesting the recent surge in applications is a blip. 
• "The Omicron variant of COVID-19 is hurting the U.S. labour market, but the good news is that this will be temporary," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania. 
• Initial claims for state unemployment benefits surged 55,000 to a seasonally adjusted 286,000 for the week ended Jan. 15, the highest level since mid-October. The increase was the largest since last July. Economists polled by Reuters had forecast 220,000 applications for the latest week. 
• Several labour market indicators such as job vacancies and unemployment point to further employment gains in the months ahead as the economic recovery continues, although weaker growth momentum and the withdrawal of government support will narrow the scope of such gains relative to 2021.  However, Fitch Solutions believes upside pressures on nominal wages could intensify over the coming months as labour markets strengthen further.

(Sources: Reuters & Fitch Solutions)