The Federal Reserve’s balance sheet increased to a record $5.86 trillion this week and the central bank reported greater use of some of its newly launched liquidity facilities, all part of its efforts to keep markets functioning smoothly amid heightened volatility related to the coronavirus pandemic.
In the three weeks since the Fed’s effort to limit the economic damage from the outbreak kicked into overdrive, the central bank’s balance sheet has mushroomed by roughly $1.5 trillion. It is now the equivalent of a quarter or more of the size of the U.S. economy before the crisis struck, and will certainly grow larger in the weeks ahead as the Fed keeps piling on assets and the economy likely shrinks.
The central bank continued to snap up Treasury securities, mortgage bonds and other assets, according to data released on Thursday. The Fed’s holdings of mortgage-backed securities increased to $1.46 trillion from $1.38 trillion. Treasury holdings rose to $3.34 trillion from $2.98 trillion.
Oil prices fell on Friday, coming off their biggest one-day gains in the previous session, reflecting market scepticism about a deal U.S. President Donald Trump said he had brokered between Saudi Arabia and Russia to cut output.
Brent crude futures fell 3.2%, or 97 cents, to $28.97 per barrel as of 0636 GMT, after having soared 21% on Thursday. U.S. West Texas Intermediate (WTI) crude futures fell 4.1%, or $1.04, to $24.28 a barrel, after having surged 24.7% on Thursday.
Analysts said it was hard to see a deal to call off the Saudi-Russian price war going ahead without the participation of other major producers, or whether any such deal could come quickly enough and be large enough to balance the market in the face of a deep economic recession caused by the coronavirus pandemic.
Jamaica will experience a recession in 2020 as its economy faces a combination of public health measures aimed at slowing the spread of Covid-19 that significantly disrupt day-to-day commerce, a collapse of tourism and reduced goods export demand.
As a result, Fitch has revised down its 2020 real GDP growth forecast, for the Jamaican economy, from 0.1% y-o-y previously to -2.6%. Growth is expected to recover slowly in H220, before reaching 1.1% in 2021.
A more pronounced slowdown in global economic activity and an extended coronavirus outbreak pose downside risks to Jamaican economic activity. In other words, a slower-than-expected rebound in global economic growth or extended travel restrictions would lead to a deeper contraction in Jamaican economic activity.
For the 2020/21 fiscal year, the National Export-Import Bank of Jamaica Limited (EXIM) will continue to pursue activities aimed at facilitating the growth and development of micro, small and medium-sized enterprises (MSMEs).
Those targeted are involved in the manufacturing, agro-processing, mining, services, information, communications and technology and the creative industries.
This is contained in the 2020/21 Public Bodies’ Estimates of Revenue and Expenditure, tabled in the House of Representatives by Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke.
The Bank also projects loan utilisation of $9.3Bn, supported by increased marketing activities, brand building and market analysis.
The global spread of the Covid-19 (coronavirus) pandemic will significantly impact Aruba’s economy, as domestic restrictions and a sharp drop in demand for travel will push the country into recession in 2020.
Fitch Solutions forecast -13.0% y-o-y real GDP growth in Aruba in 2020, down from the previous forecast of 0.7%, as risks from the virus have played out.
While the Aruban government’s prompt response to its domestic outbreak offers some reason for optimism, risks to our view are heavily to the downside.
Cuba said on Tuesday it was suspending the arrival of international passenger flights and asking all foreign boats to withdraw from the Caribbean island’s waters to curb the spread of the new coronavirus.
Cuba, which has confirmed 186 cases of the fast-spreading disease, partially closed its borders last week, banning the arrival of foreign tourists and the departure of Cubans.
But Cubans and foreigners with Cuban residency continued to return on a dwindling number of flights, although they were required to spend two weeks in quarantine at state isolation centres. The new measures appear to close that door.
China’s ports and shipping firms are bracing for a second wave of supply chain disruptions that may be deeper and more prolonged than during the country’s coronavirus lockdown as the global spread of the virus chokes off international demand.
With Beijing reporting only sporadic domestic transmission of the coronavirus since March, workers have been allowed to return to posts, factories are restarting and ports are rushing to clear a backlog of cargoes.
China’s container processing volumes fell 10.6% in the first two months of 2020 compared to the year before, while exports dropped 17.2%.
But with virus outbreaks now overwhelming healthcare systems and shutting logistics channels in other major economies, exporters and industry analysts warn that global demand for products made and shipped out of China looks set to plunge.
Oil fell towards $25 a barrel on Wednesday, within sight of its lowest in 18 years, as a report showing a big rise in U.S. inventories and a widening rift within OPEC heightened oversupply concerns.
Pledges of higher output from Saudi Arabia and Russia after a supply pact collapsed and a slide in demand due to the coronavirus outbreak have hammered the market. Global benchmark Brent crude fell 66% in the first three months of 2020 in its biggest ever quarterly loss.
As of 1217 GMT, June Brent LCOc1 was down 94 cents, or 3.6%, at $25.41. U.S. West Texas Intermediate crude for May Clc1 was down 11 cents at $20.37. Brent fell to $21.65 on Monday, the lowest since 2002, when the now-expired May contract was the front month.
Minister of Tourism, Hon. Edmund Bartlett, says tourism stakeholders have responded positively to the Government’s stimulus package for the sector, to cushion the effects of the coronavirus (COVID-19).
“The workers of the industry are very heartened by the action of the Government. In fact, they have been indicating their delight that something is being done. We are in the process of working out the details of it, but the feeling is one of hope, and the feeling is one of appreciation of the steps the Government is taking,” he told JIS News.
I “Hopefully, at the end of the day, we can come out with a better product and with a better understanding of the new realities. Then Jamaica would be in a position to take off ahead of anybody else, and that’s the objective,” the Minister said.
The Government has allocated $140 million to Councillors across the island to help in the fight against the coronavirus (COVID-19), and to assist persons in their division who have been affected by the virus.
These funds, Mr. McKenzie said, will be used under specific guidelines set out by the Ministry, along with the Ministry of Finance and the Public Service as well as the Ministry of Health and Wellness.
“The details of those will be worked out, but the benefits of this programme is to reach those in the various communities across the country who are affected by what is taking place,” the Minister added.
