• New applications for U.S. unemployment aid unexpectedly fell last week. Still, the number of people collecting benefits in mid-October was the highest in nearly three years, indicating it was becoming harder for those losing jobs to land new positions.
• The second straight weekly drop in filings for state unemployment benefits reported by the Labor Department on Thursday likely reflected an ebb in claims from Hurricane Helene, which earlier this month had boosted applications to the highest level in nearly 1-1/2 years. The rise in claims related to Hurricane Milton has been more muted than initially feared.
• Given the distortions from the hurricanes and an ongoing strike by roughly 33,000 workers at Boeing, economists expected Federal Reserve officials to shrug off any sharp slowdown in nonfarm payrolls growth or rise in the unemployment rate when they meet next month. Though the hurricanes and the strike have obscured the labour market view, there does not appear to be a material shift.
• The Fed's "Beige Book" report on Wednesday described employment as having "increased slightly" in early October, "with more than half of the districts reporting slight or modest growth and the remaining districts reporting little or no change." It also noted that "many districts reported low worker turnover, and layoffs reportedly remained limited," adding that "demand for workers eased somewhat, with hiring focused primarily on replacement rather than growth."
• That was reinforced by a survey from S&P Global on Thursday showing a measure of employment in the manufacturing and services sectors holding steady in October. S&P Global said a decline in service jobs was "often linked to the non-replacement of leavers rather than layoffs."
• Historically low layoffs are propping up the labour market and the overall economy even as hiring has tapered off. Economists estimate that the hurricanes could cut as many as 40,000 jobs from October's nonfarm payrolls count. Estimates for payroll gains are currently in the 100,000 to 125,000 range.

(Source: Reuters)

• Eurozone business activity stalled again this month, remaining in contractionary territory as demand from both home and abroad fell despite firms barely increasing their prices, a survey showed on Thursday.
• HCOB's preliminary composite eurozone Purchasing Managers' Index, compiled by S&P Global, nudged up to 49.7 in October from September's 49.6 but remained below the 50-mark separating growth from contraction for a second straight month.
• A Reuters poll predicted a bigger lift to 49.9. "The survey is in line with a weak economic environment with slowing inflation thanks to softening demand," said Bert Colijn at ING."The PMI was slightly up thanks to an easing contraction in manufacturing, hardly something to cheer about since the manufacturing sector has been in contraction since late 2022."
• Even the more resilient services sector was experiencing a weakening of new orders, he noted. The composite new business index barely increased from September's eight-month low of 47.7 to 47.8. The new export business reading - which includes trade among eurozone members - was also sub-50.
• Business activity in Germany, Europe's largest economy, shrank in October but less steeply than in September, according to its PMI. In France, the currency union's second-largest economy, the dominant services sector contracted at its sharpest rate in seven months, dragged down by sluggish new orders.

(Source: Reuters)

• Mayberry Group Limited (MGL) reported a net loss attributable to shareholders of $560.91Mn for the nine months ending September 30, 2024 (9M 2024). This represents a 19.0% or $131.85Mn improvement on the $692.76Mn loss incurred for 9M 2023 amid a $2.35Bn rise in net operating income. 
• The rise in net operating income was primarily fueled by a $1.51Bn increase in net trading gains, largely from the sale of the Company's 20% stake in Caribbean Producers Jamaica Limited. Additionally, unrealised losses MGL’s fair value through profit and loss (FVTPL) portfolio decreased by 43.2%, or $898.99Mn.
• However, a $233.87Mn (22%) increase in net interest expense and an 11.1% decline in dividend partially offset higher operating income. Growth in securities sold under repurchase agreements (16%) and increased borrowings to fund operations (25%) accounted for the higher interest cost. The decline in dividend income was attributed to lower dividends paid by corporates due to the impact of Hurricane Beryl on earnings.
• Operating expenses rose by 18.7% (or $279.98Mn) primarily due to higher depreciation and amortization costs, assets tax payments, impairment provisions, and higher staff costs due to inflation adjustments.
• Notwithstanding the net loss, the company MGL’s capital base remained compliant with regulatory benchmarks. Its Q3 2024 capital-to-risk-weighted asset ratio was 17.7%, well above the 10% minimum set by the Financial Services Commission (FSC).
• Following the two successive interest rate cuts by the Bank of Jamaica’s Monetary Policy Committee (MPC), which signals the start of a turnaround in the monetary policy environment, management anticipates more positive tailwinds for its performance in the medium term.
• MGL’s stock price has depreciated by 12.5% since the start of the year to close Wednesday’s trading session at $7.82. It currently trades at a price-to-book of 0.59x, which is below the main market financial sector average of 1.05x.

(Sources: Mayberry Group Financials and NCBCM Research)

• The Government of Jamaica (GOJ), on Tuesday (October 22), signed a Memorandum of Understanding (MOU) with Atomic Energy of Canada Limited and Canadian Nuclear Laboratories Limited to advance nuclear technologies adoption in Jamaica.
• Addressing the signing ceremony at Jamaica House, Prime Minister, Dr. the Most Hon. Andrew Holness, said the partnership reflects the Government’s unwavering commitment to diversify the country’s energy portfolio with new, clean and sustainable alternatives.
• Currently, 85% of Jamaica’s energy is derived from fossil fuels, which the Prime Minister describes as, “a dependency that leaves us vulnerable to external shocks and global oil and natural gas price fluctuations”.
• He highlighted that France generates approximately 68% of its electricity from nuclear power, adding that this source accounts for 15% of Canada’s energy output.
• The Prime Minister noted that small modular nuclear reactors offer enhanced safety features, reduced environmental impact and a cost-effective solution for small countries like Jamaica and that taking advantage of the technology, which is rapidly developing, will provide long-term benefits for Jamaica over time.
• Regarding safety, Dr. Holness stated that technology has advanced over the years, noting that modern nuclear reactors are designed with fail-safe mechanisms that significantly reduce the risk of accidents.

(Source: JIS)

• Bloomberg reported that the withdrawal of the tax reform bill, which aimed to restructure the tax system and boost revenue collection, led to a decline in Dominican bonds. However, President Luis Abinader had predicted that this drop would be temporary.
• President Luis Abinader ordered the withdrawal of the Fiscal Modernization bill from the Chamber of Deputies. The formal withdrawal was announced by Alfredo Pacheco, President of the Chamber of Deputies, following a request from the Executive Branch.
• President Abinader had previously addressed the nation, emphasising his commitment to democracy and listening to the people’s concerns. He acknowledged that the Fiscal Modernization bill lacked the necessary consensus and stressed that a democratic government must be willing to amend decisions based on public feedback, stating, “I am a president who listens.”
• According to Bloomberg, “Dollar notes accelerated emerging market losses on Monday, with those maturing in 2060 losing up to 2.6 cents on the dollar, trading below 90 cents.” The reform aimed to raise revenue by 1.5% of GDP by increasing taxes on income, businesses, and property while reducing incentives for the film and tourism industries.
• Credit rating agencies have not (yet) reacted to the withdrawal. Currently, Fitch Ratings and Moody’s have rated the Dominican Republic three points below investment grade at BB-/Positive and Ba3/Positive, while S&P Global rates it one level higher at BB/Stable.
• Seaport Global highlighted to clients that the withdrawal was a significant setback for the country’s goal of achieving investment-grade status during Abinader’s administration. Uncertainty remains about how fiscal consolidation will be achieved, despite limits on real-term primary spending.

(Source: Dominican Today)

• The Barbados-based Caribbean Development Bank (CDB) has secured a significant upgrade to its accreditation from the Green Climate Fund (GCF), enabling the region's financial institution to develop and deliver individual climate programmes and projects valued at as much as US$250Mn.
• The CDB said that the figure is a significant increase on the previous limit of US$50Mn and will enable it to implement larger, more impactful climate response initiatives in partnership with the GCF.
• The GCF approved the upgrade on Monday, October 21, during its 40th board meeting with the Republic of Korea.
• The new threshold will enable the CDB to boost concessional climate finance for the Caribbean, accelerating climate action in the region. The expanded financing capacity also allows the CDB to help its client countries develop larger climate change adaptation and mitigation projects, particularly in capital-intensive sectors.
• Additionally, CDB is now better positioned to support regional programmes, broadening its reach and achieving economies of scale. 
• Valerie Isaac, CDB's division chief of Environmental Sustainability, said the approval reflects a vote of confidence in the CDB's ability to deliver the types of large-scale, transformational initiatives that can bolster climate change response for the region given our extreme vulnerability.

(Source: Trinidad Express Newspaper)

• U.S. economic activity was little changed from September through early October. Additionally, firms saw a slight uptick in hiring, continuing recent trends that have reinforced expectations the Federal Reserve will opt for a smaller 25-basis-point reduction in borrowing costs in two weeks.
• The U.S. central bank's latest temperature check on the economy’s health showed that inflation pressures continued to moderate. Moreover, input prices generally rose faster than selling prices, denting firms' profit margins.
• Inflation and the broader economy remain a key issue among voters ahead of the Nov. 5^th U.S. presidential election. A string of stronger-than-expected economic data and inflation, consumer spending and job gains has caused investors to dial back bets on the pace and extent of rate cuts.
• The resilient economy has been underpinned by firm income growth and ample household savings. Though labour market momentum has slowed, the level of layoffs remains historically low, supporting wage gains. U.S. job gains increased by the most in six months in September and the unemployment rate fell to 4.1%, while retail sales increased solidly last month.
• The steadiness of the labour market was reflected in the latest survey, with more districts than in the prior survey reporting slight-to-moderate growth. Demand for workers, however, eased somewhat. A source at a Minnesota supply company told the Minneapolis Fed "I about fell out of my chair" at the interest it received for a high-skill driving position it had previously struggled to fill.
• However, there were few signs of outright deterioration, with layoffs remaining limited. The San Francisco Fed noted that some employers had begun hiring for open positions that had been on hold for the past year, while wages across Fed districts "generally continued to rise at a modest to moderate pace."

(Source: Reuters)

• The United States said for the first time on Wednesday that it had seen evidence that North Korea has sent 3,000 troops to Russia for possible deployment in Ukraine, a move that could mark a significant escalation in Russia's war against its neighbour.
• U.S. Defense Secretary Lloyd Austin, speaking in Rome, said it would be "very, very serious" if the North Koreans were preparing to fight alongside Russia in Ukraine, as Kyiv has alleged. He also said it remained to be seen what they would be doing there.
• The U.S. determined the North Korean soldiers were transported by ship in early-to-mid October from North Korea's Wonsan region to the eastern Russian city of Vladivostok before being taken to three military training sites in eastern Russia, said Kirby.
• In Seoul, South Korean lawmakers said that Pyongyang had promised to provide a total of about 10,000 troops, whose deployment was expected to be completed by December, the lawmakers told reporters after being briefed by South Korea's national intelligence agency. The United States said the alleged North Korean deployment could be further evidence that the Russian military was having problems with manpower.
• The Kremlin has previously dismissed Seoul's claims about the North's troop deployment as "fake news" and a North Korean representative to the United Nations in New York called it "groundless rumours" at a meeting on Monday. Moscow and Pyongyang have also denied weapons transfers, but they pledged to boost military ties and signed a mutual defence treaty at a summit in June.

(Source: Reuters)

• The U.S. economy will continue to provide most of the thrust for global growth through the balance of this year and in 2025, led by robust consumer spending that has held up through a wrenching bout of inflation and the high interest rates used to tame it, the International Monetary Fund said on Tuesday.
• In its latest World Economic Outlook, the IMF raised its 2024 and 2025 economic growth forecasts for the U.S. - the only developed economy to see its outlook marked up for both years - and its chief economist said the "soft landing" sought by the Federal Reserve in which inflation eases without big damage to the job market had largely been achieved.
• Still, it warned that risks abound from armed conflicts, potential new trade wars and the hangover from the tight monetary policy employed by the Fed and other central banks to rein in inflation.
• The IMF revised its 2024 U.S. growth forecast upward by two-tenths of a percentage point to 2.8% due largely to stronger-than-expected consumption fueled by rising wages and asset prices. The global lender also upgraded its 2025 U.S. growth outlook by three-tenths of a percentage point to 2.2%, slightly delaying a return to trend growth.

(Source: Reuters)

• The International Monetary Fund on Tuesday raised its forecast for British economic growth this year but said the country could not take its eye off rising public debt, as finance minister Rachel Reeves prepares her first annual budget.
• The IMF said it expected 2024 growth of 1.1% this year, up from its previous forecast of 0.7%, due to lower inflation and a cut in Bank of England interest rates. It did not raise its outlook for 2025. IMF chief economist Pierre-Olivier Gourinchas also warned that Britain, like many other rich nations, required robust plans to stop the rise in public debt.
• Britain's government currently has a rule that budgets must ensure public debt falls between the fourth and fifth year of official forecasts from its budget watchdog. Reeves is considering changing the definition of debt used in her Oct. 30 budget to allow more borrowing for long-term investment.
• Last month the Organisation for Economic Co-operation and Development said Britain's debt rule had curtailed public investment without successfully containing debt. Britain's was the largest IMF forecast upgrade of any of the Group of Seven economies, and the country is now on track to have the joint third-fastest growth in the G7 alongside France.
• The news was seized on by the Conservative opposition to the new Labour Party government, who dispute Reeves' claim that they left a poor economic legacy after 14 years in power. "Today's data from the IMF confirm the economic inheritance from the last Conservative government was strong," former finance minister Jeremy Hunt said.
• The IMF's 2024 forecast is now higher than the Office for Budget Responsibility's (OBR’s) projections which underpin government budget plans. However, the Fund is less optimistic about 2025 than the OBR, limiting the potential upside for Reeves, who said she would press ahead with shoring up the public finances.
• Reeves and Prime Minister Keir Starmer have suggested higher taxes on employers and wealthier people are likely in the budget. Last year Britain's economy grew 0.3% and suffered a shallow recession in the second half of the year, but it rebounded relatively strongly in the first six months of 2024.

(Source: Reuters)