• The Federal  Reserve may have succeeded in thwarting major year-end turmoil in funding markets, but 2020 is likely to bring a whole new set of concerns.
• The U.S. central bank has been injecting liquidity into markets through repurchase-agreement operations since mid- September in a bid to keep control of short-end rates. 
• Earlier this month the Fed ramped up its offerings to help smooth the market’s path into January. It has also been bolstering system reserves through Treasury bill purchases.
• The results of the most recent repo actions, which were undersubscribed, suggest that there is now ample funding for the year-end turn. And while the rate on overnight general collateral repurchase agreements was slightly elevated on Tuesday morning, the market is not witnessing the kind of spike seen in September -- when overnight repo rates surged to 10% from around 2%.

 (Source: Bloomberg)

• It is expected that Brazil's current account deficit will widen modestly over the coming quarters, as imports rise in line with a pick up in consumption and investment.
• Export growth will be constrained by lower average commodity prices, fading benefits from Chinese trade diversion and limited progress on advancing new trade deals.
• While capital inflows will likely cover external financing needs, financing shortfalls over recent months highlight downside risks to this view.

(Source: Fitch)

• ExxonMobil continues to de-risk the offshore acreage of the Guyana-Suriname Basin with the 15th oil discovery in Stabroek Block after delivering first oil from the Liza project ahead of schedule.
• Other international companies operating in the Basin struggle to deliver results that would match Exxon's success. That said, IOCs continue to be attracted to Latin America's frontier markets, with Total farming into the Block 58 in offshore Suriname.
• The uncertainty over the legislative framework for upstream operations and the upcoming presidential elections constitute a moderate downside risk for our production forecast in Guyana.

(Source: Fitch)

• For the year ended October 2019, Main Events Entertainment Group reported profit of $97.34Mn (EPS: $0.33) which represents a marginal 2.8% improvement over the $94.66Mn reported in the prior year.
• A 28.8% (or $402.19Mn) increase in revenues together with a $7.76Mn increase in other operating income were the primary drivers for the improvement in performance. However, this was partially offset by a 27.6% (or $115.28Mn) increase in admin expenses.
• The stock has declined 10.9% since the start of the year, and closed at $6.21 at the end of Monday’s trading session.  At this price the stock currently trades at a P/E of 18.8x earnings which is below the Junior Market average of 25.2x.

(Source: MEEG Financials

• In the financial statements published for the year ended October 31, 2019, Cargo Handlers reported a modest (20.8%) dip in net profit to $130.90Mn (EPS: $0.35) down from $165.23Mn reported in the prior year.
• The company reported an increase in key expense items which accounted for a major part of the decline in net profit. In particular, direct expenses which were non-existent in the prior year increased to $8.20Mn; administrative expenses grew 42.1% (or $9.20Mn) to $31.06Mn; and other operating expenses increased 19.8% (or $32.77Mn) to $198.39Mn.
• The stock has declined 36.7% since the start of the year, and closed trading at $9.50 on Monday. The stock currently trades at a P/E of 27.1x earnings which is above the Junior Market average of 25.2x.

 (Source: CHL Financials)

• Oil prices were set for a third straight weekly gain despite a Friday fall after easing U.S.-China trade tensions lifted business confidence and the outlook for global economic growth.

• Brent LCOc1 was down 17 cents at $66.37 a barrel by 1311 GMT, equivalent to a weekly rise of around 1.8%, while U.S.

• West Texas Intermediate crude CLc1 was down 20 cents at $60.98 per barrel, a gain of around 1.5% on the week.

• Volume of oil trade remained thin in the pre-Christmas wind down.

• Progress in the trade dispute between the world’s two biggest oil consumers has raised expectations of higher energy demand next year.

(Source: Reuters)

• World stocks touched record highs on Friday, as trading wound down before the year-end holidays, while the British pound was heading toward its worst week for more than two years amid renewed worries over how Britain will leave the European Union.

• MSCI’s world equity index. MIWD00000PUS, which tracks shares in 49 countries, gained a smidgeon to 561.31, bettering a record scaled on Thursday as optimism infused markets after the United States and China agreed an initial trade deal.

• On Wall Street, futures for the S&P 500 ESc1 were flat near all-time highs, having risen more than 1% in the week.

• On the currency front, sterling steadied after suffering a sharp reversal that left it facing its worst weekly fall since late 2017 of around 2%.

(Source: Reuters)

• The central bank lowered the overnight interest-rate target for the fourth consecutive time since August by 0.25 percentage point to 7.25%, bringing borrowing costs to their lowest level since 2017.

• This is in an effort to foster an environment of confidence and certainty for investment as well as increase productivity which will in turn spur economic growth.

• The lowered interest rate narrowed the spread between Mexican and U.S. rates, since the Federal Reserve kept rates steady at its meeting earlier this month. Most analysts bet the easing cycle in Mexico will continue in the coming months at a moderate pace.

• The consensus sees the interest rate at 6.5% by the end of next year, according to a recent survey among private economists.

(Source: Wall Street Journal)

• Trinidad & Tobago’s (T&T) current account surplus will narrow over the coming quarters as declining energy production and subdued prices decrease T&T’s goods trade surplus.

• Weak economic activity and a negative interest rate differential with the United States will drive continued capital outflows, which will keep T&T’s overall external position in deficit.

• Fitch Solutions revised its current account surplus for 2019 from 8.7% of GDP to 5.7% and for 2020 from 12.7% to 5.3% as revised data showed a significantly smaller surplus in 2018 than previously reported and energy production has fallen steeply.

(Source: Fitch)

• The Trade Board Limited (TBL) is looking to expand the scope of the Jamaica Trade Information Portal (JTIP) by adding trade in services to the goods category.

• Speaking at a recent Jamaica Information Service (JIS) Think Tank session at the Agency’s head office in Kingston, Trade Administrator and TBL Chief Executive Officer, Douglas Webster, said the proposed move is primarily consequent on the service industry accounting for some 72% of Jamaica’s gross domestic product (GDP).

• “As currently constructed and operated, JTIP treats only with trade in goods. We want it to transcend that and we have an edict from Cabinet to the effect that it must be done as quickly as possible. We will be making every effort to ensure that that begins soon,” he explained.

(Source: JIS)