• Oil fell more than 2% towards $40 a barrel on Wednesday after a report showed a rise in crude inventories in the United States, reviving concerns about oversupply and weak demand due to the coronavirus crisis.
• The report from the American Petroleum Institute, an industry group, said crude stocks rose by 8.4 million barrels, rather than falling as analysts forecast. The U.S. government’s official stocks figures are due out later on Wednesday.
• Brent crude was down 82 cents, or 2%, to trade at $40.36 per barrel. West Texas Intermediate dropped 99 cents, or 2.5%, to trade at $37.95 per barrel.

(Source: CNBC)

• Minister of Foreign Affairs and Foreign Trade, Senator the Hon. Kamina Johnson Smith, has called on support from Germany in removing Caribbean Community (CARICOM) countries from the European Union’s (EU) money-laundering blacklist.
• Jamaica is among four CARICOM nations named in a new EU anti-money laundering and terrorism financing list published in May.
• Speaking at a virtual meeting of Foreign Ministers of Latin America, the Caribbean and Germany on Wednesday (June 3), Senator Johnson Smith said that the EU blacklisting continues to be a concern for Jamaica and other countries in the region.
• “We, therefore, seek the support of the Government of Germany in leveraging its influence in major multilateral fora to have these crippling structural imbalances in the international economic system swiftly addressed,” she said.

(Source: JIS)

• The House of Representatives, on Tuesday (June 2), approved the Fiscal Administration and Audit (Suspension of Fiscal Target Requirements) Order, 2020, to suspend Jamaica’s fiscal rules until March 2021 as a result of the economic impact of the coronavirus (COVID-19) pandemic.
• Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke noted that the COVID-19 pandemic has led to the triggering and activation of the suspension of the provisions of the fiscal responsibility framework.
• This, as the crisis has led to the need to deploy significant additional fiscal resources, primarily in the form of social and economic support through the COVID Allocation of Resources for Employees (CARE) Programme, and health expenditures for new personnel, equipment and supplies, as well as other critical expenditures.
• Dr. Clarke said the suspension of the fiscal rules will allow the Government to target a lower primary surplus of three and one-half per cent of GDP this fiscal year, down from 5.4 per cent. “This will allow us to accommodate the COVID-19 response expenditures in light of the reduced revenue that we are likely to experience. After the suspension has expired, the Government will be required to implement recovery mechanisms,” Dr. Clarke said.

(Source: JIS)

• Esteban Ferro, Ecuador's deputy finance minister, said on Wednesday the nation still faces a $3.5 billion financing gap as its struggles to cope with the overwhelming cost of fighting the COVID-19 pandemic.
• In a video conference open to the public, he said the shock of not only the pandemic but also the sharp drop in oil prices that slammed the economy prompted a call for "the support of our creditors to address this crisis to help Ecuador back onto a path of growth and development."
• Gross financing needs widened in 2020 to $13.5 billion from $5.6 billion, and financing gaps are expected to remain high in the coming years.

(Source:  Latinfinance)

• The value of exports from Latin America fell 3.2% in the first quarter this year as the economic effects of the coronavirus pandemic exacerbated a downward trend that started in early 2019 , the Inter-American Development Bank (IDB) said in a report published on Wednesday.
• The IDB analyzed trade in 15 countries in Latin America and found that a slump in global demand led to lower prices and a 1.2% drop in export volumes in the region.
• The value of exports from South America dropped 7.6% year-on-year in the first quarter this year, while exports from Mexico slipped 0.6% as the pandemic reached the United States, their main market. Exports from Central America, however, rose 9.1% in the first quarter, led by increases of 16.9% in Guatemala and 9.4% in Costa Rica.

(Source: Latin finance)

• Employment stunningly rose by 2.5 million in May and the jobless rate declined to 13.3% according to data Friday from the Labor Department that was far better than economists had been expecting and indicated that an economic turnaround could be close at hand.
• Economists surveyed by Dow Jones had been expecting payrolls to drop by 8.333 million and the unemployment rate to rise to 19.5% from April’s 14.7%. The May gain was by far the biggest one-month jobs gain in U.S. history since at least 1939.

 (Source: CNBC)

• U.S productivity fell at a 0.9% rate in the first three months of this year, a smaller decline than first estimated, while labor costs rose at a slightly faster pace.
• The Labor Department reported Thursday that the first-quarter decline in productivity was smaller than the initial estimate a month ago of a 2.5% drop. Labor costs rose at a 5.1% rate, slightly faster than the 4.8% increase first reported.
• Productivity, the amount of output per hour of work, has lagged over the past decade, a troubling development that economists have been unable to adequately explain. Productivity is the key to rising living standards, and the slow pace of growth in recent years has been a major reason that wage gains have lagged.

 (Source: CNBC)

• Consolidated Bakeries (Jamaica) Ltd. (Purity) reported audited net loss of $12.49Mn (EPS: -6¢) for the year ended December 31, 2019, an almost two-fold decline when compared to the $12.96Mn profit made in the corresponding period in 2018.
• This performance was mainly driven by a 14.3% (or $48.76Mn) increase in total operating expenses.
• Purity stock price has fallen 1.2% since the start of the calendar year, and closed Wednesday’s trading session at $1.64.  The stock currently trades at a P/B of 0.51x, which is below the Junior Market Manufacturing Sector Average of 2.06x.

(Source: Purity Financials)

• For the three months ended March 31, 2020, Stationery and Office Supplies (SOS) Limited reported unaudited net profit of $43.80Mn (EPS:18¢), down 23.9% (or $13.73Mn) relative to the same period one year prior.
• The main contributor to this performance was an 11.4% (or $8.81Mn) increase in administrative and general expenses, and a 433.2% (or $1.51Mn) increase in FX losses.  In additon, for the period the company reported a $1.26Mn impairment loss on financial assets compared with a  $55k gain made in the prior year.
• The stock has fallen by 42.9% since the beginning of the calendar year. SOS closed Wednesday’s trading session at $6.30 and currently trades at a P/E of 12.9x earnings, which is below the Junior Market Distribution Sector Average of 17.3x earnings.

(Source: SOS Financials)

• The Executive Board of IMF concluded the third review of the IMF’s extended arrangement under the Extended Fund Facility (EFF) for Barbados. The completion of the review allows the authorities to draw about US$139 million.
• Program implementation is strong, with all performance criteria for end-March met.
• The economy faces a major challenge owing to the global coronavirus pandemic. Access under the extended arrangement has been augmented by about US$91 million (70 percent of Barbados’ quota in the IMF) to help accommodate the shock.
• Since May 2018, international reserves have increased from a low of US$220 million to more than US$850 million at end-April 2020.

(Source: IMF)