• Argentina is on the cusp of registering another devastating default, analysts have told CNBC, as international investors anxiously await the outcome of “do-or-die” debt restructuring talks.
• Argentina’s government has said it needs to restructure $100 billion in debt, including $44 billion to the International Monetary Fund (IMF). In 2001, Argentina defaulted on around $100 billion of debt. It triggered the worst economic crisis in the country’s history and resulted in millions of middle-class citizens falling into poverty — a consequence many in Argentina blame on the fiscal policies enforced by the IMF at the time.
• Speaking from Buenos Aires, Jimena Blanco, head of Latin America at Verisk Maplecroft, told CNBC via telephone that the risk consultancy had assigned a 77% probability that Argentina would default before the end of the year.
• In an interview with Bloomberg News on Sunday, IMF Managing Director Kristalina Georgieva said that the fund would not be prepared to offer a so-called haircut on its $44 billion loan with Buenos Aires.
• The risk of the country registering another sovereign debt default — it’s ninth — had increased in recent weeks, Blanco said, citing a growing lack of policy cohesion within the coalition and a shortening timeframe to secure strong political backing.

(Source: CNBC)

• China will grant exemptions on retaliatory duties imposed against 696 U.S. goods, the most substantial tariff relief to be offered so far, as Beijing seeks to fulfill commitments made in its interim trade deal with the United States.
• Tuesday’s announcement comes after the Phase 1 trade deal between the two countries took effect on Feb. 14 and is the third round of tariff exemptions China has offered on U.S. goods.
• China has committed to boosting its purchases of goods and services from the United States by $200 billion over two years as part of the agreement, and has already rolled back some additional tariffs on U.S. imports after the deal was signed.
• S. goods eligible for tariff exemptions include key agricultural and energy products such as pork, beef, soybeans, liquefied natural gas and crude oil, which were subject to extra tariffs imposed during the escalation of the bilateral trade dispute.

(Source: Reuters)

• Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on oil demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.
• Brent crude was down $1.18 at $56.48 a barrel after rallying in the previous five sessions. U.S. West Texas Intermediate crude fell 95 cents to $51.10 per barrel.
• Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus.  The IEA last week said that first-quarter oil demand is likely to fall by 435,000 barrels per day (bpd) from the same period last year in the first quarterly decline since the financial crisis in 2009.
• The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have been considering further production cuts to tighten supply and support prices. The group, known as OPEC+, has a pact to cut oil output by 1.7 million bpd until the end of March.
• The next OPEC+ meeting in March is set to consider an advisory panel’s recommendation to lower supply by a further 600,000 bpd.

(Source: CNBC)

• Inflation in Jamaica will rise over the coming years as economic activity picks up and the cost of fuel imports rise with global crude prices.
• Consumer price inflation will move higher this year into the central bank's 4.0-6.0% target band, settling near the upper threshold of this range at 6.0% over Fitch’s 10-year forecast period.
• However, the expectation is that the Bank of Jamaica (BOJ) will keep its monetary policy accommodative in the near term, with interest rates to be lifted gradually with inflation.

(Source: Fitch)

• Jamaica will see stronger economic performance over the coming years following a reform program which will put the country on a more sustainable growth trajectory.
• After poor economic governance led to two sovereign debt defaults since 2010, Jamaica is now closely coordinating policy with the IMF in a bid to improve its business environment, rein in government spending, diversify its economy, and reduce its external vulnerabilities.
• As a result of recent and upcoming initiatives, Fitch is forecasting that real GDP growth will average 2.0% over the next decade, compared to an average of just 0.2% over the past ten years.
• Following difficult reforms including streamlining the government and reducing public outlays, Jamaica's fiscal deficit has turned into a modest surplus, and this to continue over the coming decade.
• Although Jamaica has lowered its corporate tax rate - part of its ongoing efforts to improve the business environment and incentivise investment - the government has worked to simplify its consumption tax framework and eliminate tax breaks for some industries, which will lead to increased revenues over the longer term.

(Source: Fitch)

• Honduran President Juan Orlando Hernández’s association with criminal activity will ensure that political tensions remain high over the coming quarters.
• Although demonstrations have ebbed since violent nationwide protests broke out in April 2019, persistent poverty and high levels of violent crime underpin risks to social stability.
• Fitch has revised down Honduras’ score in its Short-Term Political Risk Index to 41.7 out of 100.0, from 42.9 previously, as widespread dissatisfaction with the political elite increases the risk of significant policy change following the 2021 election.

(Source: Fitch)

• China on Thursday announced that it will halve tariffs on hundreds of U.S. goods worth about $75 billion.
• Retaliatory tariffs on some U.S. goods will be cut from 10% to 5%, and from 5% to 2.5% on others, according to a statement from China’s Ministry of Finance. The adjustments will take effect from 1:01p.m on Feb. 14, Beijing time.
• The cuts apply to about $75 billion worth of imports from the U.S. that was slapped with tariffs on Sept. 1, 2019, according to a separate statement on the ministry’s website.
• After the cut, duties on U.S. crude will be reduced to 2.5%, from 5%, and the tariff on soybeans will be trimmed by 2.5%.

(Source: CNBC)

• Oil futures rose for a second day on Thursday boosted by potential OPEC+ action to counter oil demand loss from the coronavirus outbreak and by optimism that trade tensions between the world’s two biggest economies were easing.
• A technical committee advising the Organization of the Petroleum Exporting Countries and its allies led by Russia, known as OPEC+, may reach consensus on Thursday on the need to further cut oil output by at least 500,000 barrels per day (bpd), two sources told Reuters.
• Brent futures rose by 17 cents to $55.45 a barrel, having risen 2.4% in the previous session. U.S. West Texas Intermediate futures gained 46 cents to $51.21 a barrel after rising 2.3% on Wednesday.

(Source: Reuters) 

• Jamaica Teas reported unaudited net profit of $27.70Mn (EPS: $0.04) for the first quarter December 2019, a fall-off of 44.4% (or $22.10Mn) from the $49.80Mn reported one year prior. 
• The main contributor to the performance was increased expenses: sales and marketing cost increased by 30.6% (or $3.23Mn) while administrative expenses climbed 87.4% (or 36.22Mn).  This jump in administrative costs was attributable to increased staff costs and professional fees coupled with a foreign currency transaction loss at QWI of $21.0Mn.
• The stock has declined 3.8% since the start of the calendar year. JAMT closed Tuesdays’ trading session at $6.03 and currently trades at a P/E of 11.9x earnings which is below the Junior Market Manufacturing Sector Average of 19.3x.

(Source: JAMT’s Financials)

• Market expectations for Brazil’s first monetary policy meeting of the year oscillated significantly over the six weeks since the Dec 11 gathering.
• A slightly hawkish, though rather vague, central bank statement then had left markets torn between bets on a hold or a small cut in the policy rate.
• Growth frustrations and rising concerns on the economic impact of the coronavirus outbreak have tipped our and the consensus expectation to a 25-basis-point cut to a record-low 4.25%.
• monetary policy dashboard shows that, while there still is room for an accomodative policy, the space for additional cuts has narrowed in recent months.

(Source: Bloomberg)