• Mexico's central bank expressed confidence in the country's financial system despite the "notable weakness" of Latin America's second-largest economy and risks from market volatility and potential trade conflicts.
• In its biannual financial stability report, the Bank of Mexico attributed the system's stability to strong institutions, highlighting its "solid and resilient" framework, with capital and liquidity levels exceeding regulatory requirements.
• "While the vulnerabilities and risks identified for financial stability are generally considered limited, unexpected or severe shocks could affect its proper functioning," Banxico, as the central bank is known, noted in the report.
• Mexican markets have experienced considerable volatility in the year's second half, amid elections in Mexico and the U.S., its top trading partner. U.S. President-elect Donald Trump has promised to levy a 25% across-the-board tariff on Mexican imports.
• Uncertainty over a slew of constitutional overhauls in Mexico also contributed to a weakened local currency. Still, Mexican markets have managed to behave in a "relatively orderly" manner, the report said.

(Source: Reuters)

• Víctor “Ito” Bisonó, the Minister of Industry, Commerce, and MSMEs (MICM), underscored the Dominican Republic's strategic strengths as a premier investment destination during the World Strategic Forum 2024: Prospering in the New Economy in Miami.
• He emphasised the nation’s transformation under President Luis Abinader, crediting strategic policies and sustainable development for what he called “the Dominican miracle.”.
• Bisonó outlined the Dominican Republic's strong post-pandemic recovery, highlighting a projected 5.1% economic growth for 2024—the highest in the region, as reported by the World Bank and IMF. He also emphasised Standard & Poor's recent credit rating upgrade to BB, reinforcing the nation’s economic stability and investor confidence.
• Foreign direct investment increased by 7.1% year-on-year in 2023, accounting for 41% of total inflows into Central America. The United States has been the leading contributor, representing 30% of investments over the past decade.
• Bisonó spotlighted the country’s readiness for nearshoring, particularly in the semiconductor and printed circuit industries. With incentives like decree 324-24 prioritizing semiconductor development, advantages include strategic location, robust logistics, eight international airports, top-ranked port connectivity, and skilled talent.
• Decree 324-24 is a Dominican Republic decree that was issued on June 13, 2024, to advance the country's semiconductor industry. Furthermore, Initiatives like “Zero Bureaucracy” and “24-hour Office” streamline processes, ensuring a business-friendly environment. “The Dominican Republic is not just a future opportunity—it’s a place to invest today,” he concluded.
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(Source: CarCris)

• U.S. producer prices increased by the most in five months in November but easing costs of services such as portfolio management fees and airline fares offered hope that the disinflationary trend remains in place despite stalled progress.
• A surge in the price of eggs amid an avian flu outbreak accounted for much of the bigger-than-expected rise in producer inflation last month. Other details of the report from the Labour Department on Thursday were, however, mostly favourable, prompting economists to sharply lower their estimates for the personal consumption expenditures (PCE) price measures tracked by the Federal Reserve for its 2.0% inflation target.
• The producer price index for final demand jumped 0.4%, the largest gain since June, after an upwardly revised 0.3% increase in October, the Labour Department's Bureau of Labour Statistics said. Economists polled by Reuters had forecast the PPI gaining 0.2% following a previously reported 0.2% rise in October.
• In the 12 months through November, the PPI shot up 3.0%. That was the biggest year-on-year increase since February 2023 and followed a 2.6% rise in October. The government reported on Wednesday that consumer prices increased by the most in seven months in November, while a measure of underlying price pressures continued to run warmer over the past four months.
• Wholesale goods prices surged 0.7%, accounting for nearly 60% of the monthly rise in the PPI, after edging up 0.1% in October. Food prices soared 3.1%, making up 80% of the increase in goods prices. Wholesale egg prices vaulted 54.6%, the most since June, after declining 20.6% in October.
• Core PCE inflation is one of the measures tracked by the Fed for monetary policy. It rose 0.3% for a second straight month in October. Core inflation was forecast to increase 2.8% year-on-year in November, matching October's advance.

(Source: Reuters)

• Worried over this increasingly dark outlook, and what ECB President Christine Lagarde described as "uncertainty ... in abundance", a handful of policymakers even pushed for a bigger half-percentage-point rate cut to buffer the euro zone economy. However, they settled unanimously on 25 basis points, Lagarde said, taking the ECB's deposit rate, the benchmark for borrowing costs across the 20-nation currency bloc, to 3%.
• The central bank also removed an earlier reference in its guidance to keep interest rates sufficiently restrictive, which economists took as a sign that further policy easing is coming - perhaps as soon as January, as inflation is seen settling at the ECB's 2% target in early 2025. Lagarde also warned that domestic inflation remained uncomfortably high, and that victory over excessive price growth was not yet complete.
• Investors even see a 30.0% probability that the January cut will be 50 basis points, or that the rate-cutting streak will last beyond June, taking the deposit rate to 1.75% by end-2025. The changed guidance is also a clear hint that rates could fall at least to the so-called neutral level - hard to define but probably between 2% and 2.5% - which neither stimulates nor slows growth.
• Even if Lagarde was vague about further rate cuts, she went out of her way to emphasize downside risks to growth, including from prospective trade tensions with the United States under incoming U.S. President Donald Trump. These fears fed at least partly into the ECB's economic projections, which predicted even slower growth than already expected and recovery both shallow and delayed.
• Policymakers backing a 50-basis point move argued that economic growth could fall below 1% next year if punitive tariffs are imposed as Trump has threatened. With Germany facing an early election and France struggling to find a stable government, downside risks prevail.

(Source: Reuters)

• Dolla Financial Services Limited (DOLLA) has successfully closed its $1.9Bn 12% Secured Corporate Notes, with Mayberry Investments Limited serving as the lead arranger and broker.
• This marks a significant milestone for the company, reflecting the confidence of the investment community in Dolla’s vision and growth potential. Initially targeted at $1Bn, the offer was upsized to $1.9Bn in response to strong demand.
• The Notes carry a tenure of four years, maturing on September 30, 2028, and the net proceeds from this issuance will be utilised to strategically expand the Company’s loan portfolio.
• This follows the company raising J$500Mn through an Initial Public Offer (IPO), was after which it listed on the Junior market of the JSE on June 14, 2022. The IPO was oversubscribed by approximately 950%, indicating strong investor interest in the company. 
• Dolla's stock price has increased by 11.4% since the start of the calendar year. The stock closed Wednesday’s trading session at $3.02 and trades at a P/B of 7.1x, above the Junior Market Financial Sector Average of 2.6x.

(Sources: JSE & NCBCM Research)

• Jamaica’s small farmers have, so far, generated sales totalling nearly $400Mn via the Agri-Linkages Exchange (ALEX) platform in 2024. This was disclosed by Tourism Minister, Hon. Edmund Bartlett, who noted that this out-turn resulted from trading between the farmers and hotels, describing this as being “very significant”.
• Noting that close to $1Bn was generated via the ALEX platform last year, Mr. Bartlett expressed optimism about continued growth, despite setbacks in relation to visitor arrivals due to Hurricane Beryl and other disruptions in the sector in 2024.
• “We expect that the year will end with excess of over $500Mn of trading between these small farmers,” he told JIS News.
• “So, the linkages that we’ve tried to develop between tourism, manufacturing, agriculture and the myriad of industries that operate within our space is something that we are getting more and more proud of, as a larger number of Jamaicans are becoming inserted in the tourism value chain,” Minister Bartlett added.

• The ALEX platform is a collaborative initiative between the Tourism Enhancement Fund (TEF) and the Rural Agricultural Development Authority (RADA) that has revolutionised the interaction between hoteliers and farmers.

(Source: JIS)

• The President of Panama, José Raúl Mulino, made official this Wednesday, December 11, a $500Mn financing program with the international banks Citi and BBVA, aimed at promoting the country’s economic reactivation plan, which will be managed through the state-owned Caja de Ahorros (CA).
• The program includes a financial contribution of $250 million from Citi and another $250 million from BBVA.
• “The money for the Panamanian people will not come from subsidies or royalties from the State, but from economic reactivation through the private sector, which will result in fresh money to boost the economy” the president said.
• This financing is projected to support various productive sectors, with an emphasis on small and medium-sized enterprises (SMEs), seeking to promote economic development and job creation throughout the country.

(Source: Panama Newsroom)

• Brazil's central bank raised interest rates by 100 basis points on Wednesday and signaled same-size hikes for the next two meetings as it navigates increasing inflation challenges alongside fiscal woes.
• The bank's rate-setting committee, known as Copom, unanimously increased the benchmark Selic rate to 12.25%, highlighting the negative impacts of a recent fiscal announcement by the government on asset prices, inflation expectations, and the exchange rate.
• "The committee judges that these impacts contribute to a more adverse inflation dynamics," said policymakers in the decision statement, the last under Governor Roberto Campos Neto's leadership at the central bank.
• This comes after the release of a highly anticipated spending cut package by President Luiz Inácio Lula da Silva's administration, which failed to meet expectations and has weakened confidence in the government's ability to control the growing public debt.
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(Source: Reuters)

• The Bank of Canada slashed its key policy rate by 50 basis points to 3.25% on Wednesday and indicated that further cuts would be more gradual, a shift from previous messaging that continuous easing was needed to support growth.
• The 50-basis-point cut, while widely expected, marks the first time since the pandemic that the central bank has implemented consecutive jumbo-sized cuts. In a Reuters poll of economists, 80%, or 21 out of 27 respondents, predicted that the bank would cut the overnight rate by 50 basis points. The rest forecast a quarter-point reduction.
• The policy rate is now at the top end of the bank's so-called neutral range, which is considered to be the band within which rates are just enough not to restrict growth but not stimulate it either.
• Canada's economy grew at an annualised rate of just 1% in the third quarter, less than the Bank of Canada had predicted. The Bank said fourth-quarter growth might be weaker than expected, and that planned reductions in immigration levels could cause 2025 growth to also fall short of forecasts.
• With Wednesday's reduction, the bank has now shrunk benchmark borrowing costs five times in a row by 175 basis points in a space of six months, making it the only major central bank to have reduced borrowing costs at such a rapid pace.

(Sources: Reuters)

• U.S. consumer prices increased by the most in seven months in November, but that is unlikely to discourage the Federal Reserve from delivering a third consecutive interest rate cut next week, against the backdrop of a cooling labour market and rental costs.
• Most of the rise in inflation reported by the Labour Department on Wednesday came from higher food prices as well as more expensive motel and hotel rooms. Rents, which have been the major driver of inflation, increased at the slowest pace since July 2021. That bodes well for the inflation outlook.
• In the 12 months through November, the CPI climbed 2.7% after increasing 2.6% in October. The rise in the CPI was in line with economists' expectations. The annual increase in inflation has slowed considerably from a peak of 9.1% in June 2022. Nonetheless, progress in lowering inflation to the U.S. central bank's 2% target has virtually stalled in recent months.
• The Fed, however, is now more focused on the labour market. Though job growth accelerated in November after being severely restricted by strikes and hurricanes in October, the unemployment rate ticked up to 4.2% after holding at 4.1% for two consecutive months. Excluding the volatile food and energy components, the CPI increased 0.3% in November, rising by the same margin for the fourth consecutive month.
• Despite the lack of progress in the inflation fight, investors took comfort from the moderation in the cost of rent and the fact that the core inflation had not deteriorated.

(Source: Reuters)