• The U.S. economic recovery remains on track supported by stronger consumer spending amid a pickup in the labour market and inflation that is expected to pick up pace as the economy reopens, according to the Fed’s Beige Book released Wednesday.
• The central bank’s Beige Book economic report, based on anecdotal information collected by the Fed’s 12 reserve banks through April 5, showed the U.S. economy continued to recovery at a modest pace and consumer spending strengthened amid easing pandemic restrictions. 
• Inflation, meanwhile, appears to be on the move, driven by input costs that will likely continue to push up prices in the near term.
• Federal Reserve Chairman Jay Powell continued to downplay the prospect of sustained inflation pressures and continued to suggest there was a still a ways to go until the economy is back at pre-pandemic levels.

(Source: Investing.com)

• The sharp downturn in the tourism industry was reflected in Dolphin Cove’s financial year ending December, as the company incurred a net loss of US$1.12Mn (-$0.29 cents) relative to a net profit of US$1.61Mn in 2019.
• The pandemic had led a significant decline in visitor arrivals with a session of the cruise activity a key segment for the company. This was compounded by the closure of operation in the second quarter and though operations resumed towards the latter part of the year, activity still remains significantly below pre-COVID levels. Consequently, revenues declined by 71.2% to US$4.27Mn. Other sources of income also declined, such as finance income which fell by 44.7%, but was however offset by the 51.9% reduction in finance costs. A reduction in admin and operating expenses by 56.4% and 51.2%, respectively tempered the deterioration in the company’s performance. The company also benefited from a tax credit of US$305,219 compared to the previous year’s tax expense of US$673,307.
• After decreasing by 8.7% during 2020 to $8.78, Dolphin Cove’s stock price has fallen a further 14.4% since the start of 2021. The stock closed Tuesday’s trading session at $7.52, with a corresponding P/B of 0.78x, which is below the Junior Market Others Average of 5.0x.

(Source: Dolphin Cove Ltd. Financials)

• Venezuela’s government wants funds frozen in the United States to be put toward paying for coronavirus vaccines and will keep working with the opposition to negotiate this payment, the head of the government-controlled legislature said on Tuesday.
• Allies of opposition leader Juan Guaido have for months been in talks with state officials to buy vaccines through the COVAX program using funds frozen by the U.S. Treasury as part of sanctions against the government of President Nicolas Maduro.
• Maduro over the weekend said his government had paid some $64 million to the GAVI Vaccine Alliance, spurring doubts as to whether the government would pull the plug on talks to use the frozen funds for the inoculation campaign.
• In 2019, Washington froze $342 million held by the Venezuelan central bank in the United States, as part of a sanctions program that sought to remove Maduro from power. The funds were put under the control of opposition leader Guaido and the interim government he created, but moving them requires a license from the U.S. Treasury Department Office of Foreign Assets Control (OFAC).
• The ability to access the funds would provide the country with the resources to secure a sufficient amount of vaccines for its citizens, which will help to support economic recovery prospects and governments’ fiscal performance.

(Source: Reuters & NCBCM Research)

• Puerto Rico will continue to run wide current account surpluses in the coming years, benefiting from strong inflows of federal aid related to hurricane reconstruction and Covid-19. Fitch Solutions forecast Puerto Rico’s surplus will narrow to 14.5% of GNP in the Fiscal Year 2021 (FY21; July 2020-June 2021), from 17.3% in FY20, as imports recover more quickly than exports in the near term.
• Despite a narrower goods and services surplus, strong federal aid inflows will keep Puerto Rico’s overall current account in surplus. The federal government has allocated tens of billions of dollars to Puerto Rico to help its recovery from 2017’s Hurricane Maria and a series of earthquakes in early 2020, which was supplemented by aid from the CARES Act and American Rescue Plan stimulus bills passed in 2020 and early 2021.
• Risks to aid inflows have diminished significantly under the Biden administration. Former President Donald Trump was generally critical of aid for Puerto Rico, arguing that it would be stolen or wasted, and his administration repeatedly put holds on spending assigned by Congress. In contrast, Biden’s administration has taken a number of steps to increase the flow of aid to the island, including removing restrictions on aid from the Department of Housing and Urban Development and funding for education.

(Source: Fitch Solutions)

• The U.S. economy could grow by around 5% to 6% this year, buoyed by increased vaccinations and strong fiscal aid, but the Federal Reserve is not going to pull back its support yet, Philadelphia Federal Reserve Bank President Patrick Harker said on Tuesday.
• "For now, Fed policy is going to hold steady," Harker said in remarks prepared for a virtual event organized by the Delaware State Chamber. "While the economic situation is improving, recovery is still in its early stages, and there’s no reason to withdraw support yet."
• Policymakers agreed last month to leave interest rates near zero and keep purchasing $120 billion a month in bonds until the economy makes "substantial further progress" toward the Fed's goals for inflation and maximum employment. A full economic rebound cannot happen until more people are vaccinated and the U.S. reaches herd immunity, he said.
• Despite concerns among some economists and politicians that inflation could shoot higher as the economy heals, Harker said he is concerned with the opposite - inflation that is too low. Over the longer term, the Fed wants inflation to run above its 2% target to make up for long periods of falling short of the goal, Harker said.

(Source: Reuters)

• China's exports rose sharply in March while imports growth surged to the highest in four years in yet another boost to the nation's economic recovery, signaling improving global demand amid progress in worldwide COVID-19 vaccination.
• The data suggests the world's second-largest economy will continue to gather momentum as it emerges from the COVID-19-led slump in early 2020, though a lagging consumer rebound, a resurgence in COVID-19 cases in many countries and Sino-U.S. tensions have raised risks for the outlook.
• Exports in dollar terms soared 30.6% in March from a year earlier, but at a slower pace from a record 154.9% growth in February. The analysts polled by Reuters have forecast a 35.5% jump in shipments.
• "Strong foreign demand is likely to be sustained throughout the second quarter as the global economy further recovers," said Nie Wen, an economist at Hwabao Trust. "But with the acceleration in global vaccination efforts, industrial sectors in other countries are gradually restarting. It remains to be seen that if China's stellar export growth will begin to slide."

(Source: Reuters)

• Tourism stakeholders are appealing for strong take-up of the coronavirus (COVID-19) vaccine among workers and operators in the resilient corridors. Chairman of the Tourism Resilient Corridors Committee, John Byles, has said that the move will propel Jamaica to “the front of the line” as a nation “that is taking the vaccination exercise very seriously.” He urges all tourism interests along the corridors to mobilize so that businesses can be protected through being able to communicate the full vaccination of the corridors.
• President of the Jamaica Hotel and Tourist Association (JHTA), Clifton Reader has welcomed the move by the Government to prioritize the tourist sector. He said that the vaccination exercise is particularly important as the country’s main source market, the United States, is urging its citizens to only travel to COVID-19-vaccinated nations. He noted that the full vaccination of the resilient corridors’ employees and management will provide the perfect narrative for Jamaica as a premier tourist destination.
• Montego Bay businessman, Jason Russell, has pointed out that cruise ships have made known their intentions to go only to vaccinated destinations when sailing resumes. Also, Chairman of the Tourism Enhancement Fund (TEF) Godfrey Dyer has said that the Ministry of Tourism will continue to educate sector workers about the importance of taking the vaccine, adding that Jamaica is poised for a massive return to tourism prominence.

(Source: JIS News)

• Jamaica Producers Group Limited (‘JP’) announced that it has entered into an agreement to acquire a 50.0% shareholding interest in Geest Line Limited. Geest Line Limited, based in the UK, is a leading shipping line connecting Europe and the Caribbean and has operated in the trade for more than 65 years.
• Chief Executive Officer of JP, Jeffrey Hall, has stated that this acquisition is a key part of JP’s strategy to continue to strengthen and expand its investment portfolio in Caribbean Logistics and Infrastructure. Sealines Holding N.V., a worldwide leader in reefer vessel shipping services, will hold the remaining 50% interest in Geest Line Limited.

(Source: Jamaica Producers Group Limited)

• The Banco Central de Chile (BCC) will hold its benchmark policy rate at 0.50%, its technical minimum, and keep in place a suite of unconventional policies through end-2021 in an effort to support Chile’s economic recovery.
• However, the agency has revised up its end-2022 policy rate forecast to 1.25%, from 0.75%, due to its more optimistic outlook for economic activity in Chile. In addition, it also increased its 2021 average inflation forecast to 3.2%, from 3.1% previously, as it expects base-effects and rebounding private consumption to push price growth above the 3.0% midpoint of the BCC’s target inflation band in Q221 and Q321.
• The risks to the forecast are weighted to the upside as higher inflation could push the BCC to tighten sooner than currently expected. Supply chain bottlenecks amid the continued global spread of Covid-19 and robust consumer demand could lead to a multi-month upsurge in inflation beyond the 4.0% upper bound of the BCC’s inflation target band. If inflation expectations shifted upwards, the BCC is expected to begin tightening monetary policy to contain price growth.

(Source: Fitch Solutions)

• Following the surprise first-round result in Peru’s April 11 general election, leftist Pedro Castillo will face either right-wing candidate Keiko Fujimori or Centre-right candidate Hernando de Soto in a June 6 presidential election run-off.
• However, the ongoing uncertainty and elevated risks to policy continuity will threaten investor sentiment ahead of the second round in June, particularly as Castillo's party has campaigned on leftist economic policies.
• Preliminary results indicate that the next Congress will remain highly fragmented. Castillo’s Perú Libre party will likely win the most seats, yet fall well short of a majority as 11 parties are expected to win representation in the 130-seat legislature.

(Source: Fitch Solutions)