• According to the BOJ, the financial sector has generally remained well-capitalized despite the on-going impact of the COVID-19 pandemic and its dampening effect on the earning capacity of financial institutions.
• Entities continue to hold capital positions well in excess of the prudential minimum and there has been a broad shift away from risky investments towards less risky assets.
• Risk exposure indicators for deposit-taking institutions (DTIs) and Security Dealers (SDs) showed mixed results. In addition to a deterioration in foreign exchange risk across both sectors, there was some weakening in the household credit risk measure for the DTIs. There was, however, an improvement in interest rate risk exposure of the sector.
• Composite indicators of macro-financial conditions deteriorated. However, the micro-based measure of financial stability was broadly stable and continued to reflect a healthy banking system.

(Source: BOJ)

• Some hotels in Jamaica are reporting between 60-90% occupancy through a combination of local and international guests and this is fueling optimism for a healthy 2020-winter tourism season Minister of Tourism, Hon. Edmund Bartlett has said.
• He also noted that several hotels are redefining the meaning of luxury to accommodate more private experiences, including Eclipse at Half Moon.
• There are also other developments at Chukka Cove in Ocho Rios, the additional expansion of high-end hotels along the Elegant Corridor in Montego Bay, and other planned development expansion in Trelawny and St. Ann.
• Meanwhile, noting that “Jamaica is a destination that always seeks to punch above its weight, Nicola Madden Greig, Chair, JAPEX Organizing Committee and Past President of the Jamaica Hotel & Tourist Association (JHTA) said that despite COVID-19 Jamaica is not only poised “to regain market share and survive but also, to thrive.”

(Source: JIS News)

• Nicaragua will run wide current account surpluses in 2020 and 2021, as strong exports and remittance inflows outweigh a recovery of imports in the months ahead.
• Fitch Solutions forecasts Nicaragua’s current account surplus will widen to 10.3% of GDP in 2020, from 6.0% in 2019, before narrowing somewhat to 6.8% in 2021 as the global economy recovers from COVID-19.
• While wide surpluses and rebounding foreign reserves will support Nicaragua’s external account stability, US sanctions and domestic political unrest pose an ongoing risk to this outlook.

(Source: Fitch Solutions)

• Real GDP in Costa Rica will significantly contract through the end of 2020 amid the COVID-19 pandemic before a sluggish recovery begins in 2021, supported by rebounding domestic commercial activity and tourism inflows.
• The likelihood of fiscal austerity in the coming years will limit public expenditures, push unemployment higher, and restrict private consumption, capping the country’s longer-term upside.
• Fitch Solutions revised its 2020 and 2021 real GDP growth forecasts to -5.3% and 3.0% y-o-y, from -4.1% and 3.1% previously, as the COVID-19 pandemic will have a more severe impact on short-term growth than previously expected.

(Source: Fitch Solutions)

• The dollar edged up on Tuesday and the yen stayed low, as investors remained optimistic about progress towards a COVID-19 vaccine, although the moves were more tempered than in the previous session.
• U.S drugmaker Pfizer Inc and German partner BioNTech SE said on Monday a large-scale clinical trial showed their vaccine was more than 90% effective in preventing COVID-19 - news that lifted global markets with a wave of risk appetite, which subsided somewhat overnight before re-igniting on Tuesday.
• The dollar rose after the announcement. Although the dollar is a safe-haven, and so typically falls on positive news, analysts said the move was caused by investors quitting long positions in other major safe-haven currencies such as the Japanese yen and the Swiss franc.

(Source: Reuters)

• France’s unemployment rate rose to its highest level in two years in the third quarter, the INSEE (National Institute of Statistics and Economic Studies) statistics office said on Tuesday, as the euro zone’s second-biggest economy grapples with the fallout from the COVID-19 crisis.
• INSEE said the jobless rate jumped to 9.0% from 7.1% in the second quarter, its highest level since the third quarter of 2018.
• INSEE said that marked the single biggest quarterly increase on record going back to 1975, but it was largely because the rate had been skewed in the previous two quarters because people were not able to look for work due to a mid-March to mid-May coronavirus lockdown.

(Source: Reuters)

• Mayberry Investments Limited (MIL) reported a net loss attributable to shareholders of $663.77Mn (EPS: -$0.55) for the nine months ended September 30, 2020, down 254.6% (or $1.09Bn) from the corresponding period in 2019.
• The performance over the period was driven by an 88.9% (or $1.73Bn) reduction in net interest income and other revenues, primarily due to a reduction in fees and commission income by 40.7% (or $206.76Mn), lower net foreign exchange income (down 45.1% or $144.49Mn), and a decline in the value its investment portfolio by 244.4% (or $1.78Bn).
• The negative performance was tempered by a decrease in operating expenses by 15.0% (or $199.73Mn), on account of a reduction in depreciation and amortization expenses by 30.7% (or $259.15Mn).
• Management noted that the global and local financial markets continue to experience the negative impact of the COVID-19, and as the financial environment continues to evolve, the organization will continue to assess the financial landscape.
• The company’s stock price has declined by 38.2% since the start of the year, closing Wednesday’s trading session at $5.56. At this price, the stock currently trades at a P/B of 0.7x, which is below the Main Market Financial Sector Average of 1.7x.

(Source: MIL Financials)

• Honduras’ current account surplus will narrow in the quarters ahead as rebounding economic activity pushes up goods import demand.
• Global economic recovery in 2021 will support Honduran exports and remittance inflows, which will limit the narrowing of Honduras’ current account surplus.
• Fitch Solutions revised its 2020 current account forecast to 4.5% of GDP, up from 2.3% previously, and its 2021 forecast to 2.5%, from 0.7%, as the continued spread of Covid-19 has caused longer-than-expected weakness in import demand.

(Source: Fitch Solutions)

• Candidates for the incumbent, pro-statehood Partido Nuevo Progresista appear to have won Puerto Rico’s gubernatorial and congressional elections on November 3.
• However, local legislative elections saw the PNP lose its majorities to the pro-commonwealth Partido Popular Democrático, while third parties also made gains.
• The PNP’s territory-wide victories and the substantial authority held by the unelected Financial Oversight and Management Board suggest that policy continuity will remain high over the coming years.
• In addition, a referendum on statehood appears to have passed, though Fitch Solutions believe the US Congress remains unlikely to admit Puerto Rico as the 51st state.

(Source: Fitch Solutions)

• The U.S. trade deficit fell in September after hitting a 14-year high the previous month as exports outpaced imports.
• The gap between what the U.S. sells and what it buys abroad fell to $63.9 billion in September, a decline of 4.7%, from a $67 billion deficit in August, the Commerce Department reported Wednesday.
• September exports rose 2.6% to $176.4 billion, pushed higher by the food and beverage category, where shipments worth $12.9 billion were the highest since July of 2012. Soybean exports rose 63% in September. Imports ticked up 0.5% to $240.2 billion, also helped by $13.5 billion in the food and beverage category, which were the highest on record.
• Year to date, the goods, and services deficit has jumped $38.5 billion, or 8.6%, to $485.6 billion. The total deficit for goods and services for the same period in 2019 was $447.1 billion. Total exports are down 17.4% this year from 2019, while imports have declined by 12.4% as the coronavirus pandemic has sabotaged global commerce this year and disrupted global supply chains everywhere.

(Source: CNBC)