• President Joe Biden’s top trade negotiator said that the U.S. has “real concerns” about Mexican President Andres Manuel Lopez Obrador’s energy policy and will look for avenues to address them. 
• The American and Canadian energy industries say the leader known as AMLO is discriminating against foreign companies with changes to electricity and hydrocarbons laws. 
• His administration has sought to roll back the 2013-2014 energy reforms that opened Mexico to private drilling, working to return much of the energy sector to state-owned crude producer Petroleos Mexicanos and electric utility Comision Federal de Electricidad. 
• “We are raising our concerns, we are here to engage, and we will be exploring avenues for addressing our concerns,” U.S. Trade Representative Katherine Tai told reporters on Wednesday after finishing a meeting with Mexican Economy Minister Tatiana Clouthier and Canadian Trade Minister Mary Ng.

(Source: Reuters)

• The European Commission upgraded its euro zone growth forecasts on Wednesday, shrugging off growing worries about new COVID-19 variants and the impact of supply bottlenecks on factory production in Germany, the region's top economy. 
• German industrial output fell in May, data showed, while the country's main auto association downgraded its 2021 car sales forecast. Persistent global semiconductor shortages were cited as a factor in both. 
• The European Union's executive Commission nonetheless predicted the euro zone will grow by 4.8% this year, after the reopening of economies in the second quarter and on hopes of a better tourist season. That is much faster than the 4.3% expansion it had forecast in May. The rebound from the economic crisis caused by the pandemic is projected to continue next year, when the euro zone is forecast to grow by 4.5%, more than the 4.4% estimated in May. 
• But the Commission warned its estimates were based on the assumption there will be a further easing of pandemic-induced restrictions in the second half of 2021. Risks about the outlook therefore remained high, although they were seen as balanced.

(Source: Reuters)

• The International Monetary Fund on Wednesday said further fiscal support in the United States could fuel inflationary pressures and warned that the risk of a sustained rise in prices could require raising interest rates earlier-than-expected. 
• Higher U.S. interest rates, in turn, could lead to a sharp tightening of global financial conditions and significant capital outflows from emerging and developing economies, IMF Managing Director Kristalina Georgieva said in a blog published Wednesday with the IMF's surveillance note for G20 countries. 
• The IMF's assessment of U.S. inflation risks comes amid sharp criticism by Republican lawmakers of President Joe Biden's multi-trillion-dollar plans to boost spending on infrastructure, child care, community college tuition and expanded coverage of home care for the elderly and disabled. 
• Georgieva said an accelerated recovery from the COVID-19 pandemic in the United States, where growth is seen reaching 7% in 2021, would benefit many countries through increased trade, but rising inflation could be more sustained than expected. The IMF forecasts global growth of 6%. Other countries face rising commodity and food prices, which are now at their highest level since 2014, putting millions of people at risk of food insecurity, the IMF said in its report. 
• The IMF urged countries to continue accommodative monetary policies, while closely monitoring inflation and financial stability risks. In countries where the recovery was accelerating, such as the United States, it would be "essential" to avoid overreacting to transitory increases in inflation, Georgieva said.

(Source: Reuters)

• Eppley Limited recently published its prospectus inviting investors to subscribe to three classes of preference shares valued at J$1.20Bn in total. The company has invited investors to purchase 15Mn Class A shares with a dividend yield of 5.00% that mature in 2023; 25Mn Class B shares with a dividend yield of 7.25% that mature in 2026; and 20Mn Class C shares with a dividend yield of 7.75% that mature in 2028.  All three classes of shares are priced at J$20 per share. 
• The proceeds will be used to refinance existing debt, specifically the following issues: US$1.50Mn note due August 2021 (4.75% pa), J$361.60Mn preference shares due December 2021 (8.25% pa), J$335Mn note due July 2022 (8.00% pa) and J$250Mn preference shares due December 2023 (8.75% pa). A portion of the proceeds will also be used to pay the expenses of the invitation, which the directors believe will not exceed $35Mn. 
• The success of this raise will help to strengthen the company’s financial position and contribute to cost savings since it will result in a reduction in the average interest cost of the existing debt issues. In addition to this, the newly issued preference shares are all denominated in $J dollars, which means that it will remove the foreign exchange risk on the USD debt. 
• Eppley currently has four preference shares listed on the stock market, which include: EPPLEY 7.50% (J$7.00), EPPLEY 8.25% (J$6.00), EPPLEY 6.00% (US$1.01) and EPPLEY 8.75% (J$7.52).  The EPPLEY 7.50% and 8.25% issues have appreciated by 57.0% and 18.3% respectively, since the start of the year, while the EPPLEY 6.00% has remained flat at US$1.01. The EPPLEY 8.75% on the other hand has declined by 3.2% year to date.

(Source: Eppley Prospectus & NCBCM Research)

• With strict security measures and protocols to protect tourists and residents against COVID-19, most of the Caribbean islands, including Jamaica, have been reopened to international travelers. However, several islands have volatile entry requirements as COVID cases rise or fall irregularly. Considering the variations in the pandemic protocols, tourist product offerings and reviews by visitors and experts, Insider Monkey published a list of 25 Caribbean countries to visit on which Jamaica was ranked 2nd. 
• The ranking was based on Jamaica’s lush green mountains, golden beaches, turquoise waters, coral reefs, and rainforests, which underscores the diversity of experience the island offers to visitors. The safety measures implemented by the island, provide visitors with a greater sense of security in the government’s intent and ability to protect their well-being. 
• This positive ranking augurs well for the sector, which is expected to see the pace of recovery accelerate during H2 2021, aided by the progress in vaccination programmes, fiscal stimulus, economic re-opening and falling unemployment in source markets. 
• Insider Monkey is a finance website that provides free insider trading and hedge fund data to ordinary investors. It also provides high quality evidence based articles to inform individual investors about the intricacies of investing.

(Source: Insider Monkey & NCBCM Research)

• The Guyanese government's fiscal deficit will narrow to 4.7% of GDP in 2021, from 5.8% in 2020, due to accelerating public revenue growth.  
• While the country’s oil boom underpinned 43.5% real GDP growth in 2020, depressed economic activity in the non-oil sector caused total revenues to contract 6.9%. In addition, the price of Brent crude oil fell below pre-COVID-19 levels throughout much of the year, limiting the government’s intake from oil sales. 
• In 2021, broadening economic growth and higher energy prices will drive revenue growth and help shrink the budget shortfall. Notwithstanding, President Irfaan Ali will likely sustain higher public spending levels in the short-to-medium term, which will keep the budget balance in deficit despite the revenue-positive tailwinds.

(Source: Fitch Solutions)

• June was the Dominican Republic’s best tourism showing since the onset of the pandemic, officials said this week. A total of 468,367 travelers visited the Dominican Republic in June, a 20% jump from the 390,554 visitors that came to the country in May.  
• The June number represents about 80% of the visitors that came to the country in June 2019, according to Dominican Republic Tourism Minister David Collado.  In all, the country has welcomed just over 1.64 million passengers to the country so far in 2021, Collado said, that came from a total of 19,725 flights.  
• The influx of tourist arrivals was in large part due to a relatively liberal entry protocol. This has allowed the country to be among the strongest performers in the Caribbean in 2021. The country is ranked 19^th on Insider Monkey’s 25 best Caribbean islands to visit. 
• The strong recovery in the country’s tourism sector will be a significant driver of its economic rebound as the sovereign is expected to grow by 6.0% in 2021, following a 6.7% contraction in 2020 (Fitch Solutions). In addition to demand for its tourism product, robust external demand for Dom Rep’s goods and other services, as well as a swift national vaccination campaign will underpin this economic rebound over the coming quarters.

(Source: Caribbean Journal & NCBCM Research)

• Disagreement within OPEC could trigger a more a volatile period for oil, with prices jumping on lack of new supply or sinking suddenly if member countries decide to release crude independently. 
• Oil prices initially surged to a six-year high on news that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, ended their meeting Monday with no action and no new meeting date. A proposed plan by OPEC, Russia and other allies to bring 400,000 barrels a day back to the market was disrupted by the United Arab Emirates’ objection to other aspects of the deal. 
• West Texas Intermediate crude futures for August traded as high as $76.98 Tuesday before falling back to settle down 2.4% at $74.53 per barrel. Many analysts had expected oil to rise on the discord among members of OPEC, and say prices could still climb despite the sell-off. 
• “It’s going to get worse before it gets better. I still think $85 to $90 per barrel should be the upper end,” said John Kilduff, partner with Again Capital. “You’ll see more oil produced. They’re not going to go crazy, but they’re not going to live within the current structures. Russia will lead the charge.” 
• Some analysts had already expected oil spikes into the $100 per barrel range over the course of the next year. The feuding between Saudi Arabia and the United Arab Emirates opens a new fissure in OPEC, which now means oil could also tank if members decide to open the spigots.

(Source: CNBC)

• The United States on Tuesday urged China and the private sector to increase their participation in a G20 debt moratorium for low-income countries hammered by the COVID-19 pandemic, and a common framework for restructuring their debts. 
• A senior U.S. Treasury official said Washington was open to expanding the common framework for debt treatment agreed by the G20 and the Paris Club beyond just low-income countries to include small island states, fragile states and even some lower middle-income countries with high debt burdens. 
• G20 finance officials will review progress on the debt issue when they meet in Venice on July 9-10, amid growing alarm about a looming debt crisis. 
• The head of the International Monetary Fund, Kristalina Georgieva, has warned repeatedly about a "dangerous divergence" in the pandemic response and economic prospects that could leave developing countries lagging far behind for years. 
• The official said Washington would urge G20 countries to continue providing fiscal stimulus to aid the global recovery, and make transformative investments to address climate change and income equality.

(Source: Reuters)

• Bank of Jamaica (BOJ) Governor, Richard Byles, says work is being finalized to commence pilot implementation of the proposed central bank digital currency (CBDC) locally, in August. Mr. Byles indicated that technical support for the CBDC’s rollout, among other inputs, are being reviewed to facilitate onboarding of the first financial institution – National Commercial Bank (NCB) – to test the system. 
• The Governor said between September and December, the BOJ will look to onboard more banks, and will gradually expand the pilot into a full rollout in 2022. 
• CBDC is a form of central bank-backed currency and is, therefore, legal tender. It can be exchanged, dollar for dollar, with actual cash and is issued to licensed deposit-taking institutions (DTIs). Individuals, households, and businesses can use it to pay for goods and services, as obtains with cash. 
• According to the Bank, the benefits to be derived by citizens, businesses and the Government from the adoption and introduction of a viable digital currency solution include increased financial inclusion and another means of efficient and secured payments. Additionally, the BOJ says CBDC represents an opportunity for DTIs to improve cash management processes and costs.

(Source: Bank of Jamaica)