• The April 2019 survey indicated expected inflation of 4.5% for the calendar year 2019, which was higher than the March 2019 survey outturn of 4.2%. The expected inflation 12 months ahead increased to 4.7% relative to the previous survey outturn of 4.5%.
• The perception of inflation control decreased marginally in the April 2019 survey relative to the March 2019 survey.
• Respondents anticipate that the currency will appreciate by 1.2%, 0.7%, and 0.7% over the 3-month, 6-month, and 12-month horizons respectively.
• The majority of respondents continued to believe that the Bank’s Policy rate will remain the same over the next three months.
• In the April 2019 survey, the Present Business Conditions Index decreased marginally to 127.9 relative to 128.9 recorded in the previous survey. The Future Business Conditions Index also decreased to 145.0 relative to 153.5 in the previous survey.

 (Source: BOJ)

• Economic activity in Trinidad & Tobago (T&T) will undergo a modest expansion in 2019 as energy production continues to rise.
• However, T&T will face headwinds from contractionary fiscal and monetary policy and slowing global growth, which will weigh on consumption and investment.
• Fitch Solutions maintain its forecast for real GDP to expand by 1.3% in 2019, following a growth estimate of 1.0% in 2018.

 (Source: Fitch)

• The Government of the Republic of Ghana has pledged to support Guyana in the development of its Oil and Gas Industry through capacity building. President of Ghana, Nana Addo Dankwa Akufo-Addo, offered his support on Tuesday when he led a high-level delegation into bilateral talks with President David Granger and his ministers at State House.
• President Akufo-Addo gave a clear commitment to have Oil and Gas experts from Ghana travel to Guyana to assist in the development of the Oil and Gas Industry with a majority of the expense being covered by the Ghanaian Government. An agreement was also signed to abolish the visa requirement for citizens desirous of traveling between the two countries.
• The President spoke about the establishment of a Ministry of Energy, and that it is going to require an expanded level of talent of persons and their skills. U.S oil giant, ExxonMobil, has made 13 oil discoveries to date in Guyana.  And with these significant developments in the budding Oil and Gas Sector, President Granger has said that a Minister of Energy would become a necessity; however, it will not be established before 2020.

 (Source: Guyana Chronicle)

• The U.S. budget deficit widened to US$738.6Bn in the first eight months of the fiscal year, a US$206Bn increase from a year earlier, despite a revenue boost from President Donald Trump’s tariffs on imported merchandise.
• The shortfall was 38.8% more than the same period a year ago, the Treasury Department said in its monthly budget review released on Wednesday. So far in the fiscal year that began Oct. 1, a revenue increase of 2.3% hasn’t kept pace with a 9.3% rise in spending.
• As Trump ratcheted up the trade war with China with higher levies on imports from the Asian nation, the U.S. recorded US$4.9Bn in customs duties in May, bringing the total to US$44.9Bn in the first eight months of the fiscal year – almost double the same period a year earlier. Trump has repeatedly boasted that the U.S. is taking in billions in dollars through the tariffs, though importers in America are actually paying the levies.
• The deficit is forecast to reach $897 billion this fiscal year, from US$779Bn last year, and rise to more than US$1Tn in fiscal 2022, according to the Congressional Budget Office. In May, the fiscal deficit increased to US$207.8Bn, up 41.5% from the same month last year. The forecast in a Bloomberg survey of economists was US$202.5Bn.

 (Source: Bloomberg)

• Suspected attacks on two tankers off the coast of Iran saw oil markets erupt out of their recent slump on Thursday and kept traders gobbling up ultra-safe government bonds, gold, and the Japanese yen.
• Brent surged as much 4% after reports of the attacks added to already heightened tensions between Iran and the United States. The area is near the Strait of Hormuz through which a fifth of global oil consumption passes from Middle East producers.
• The crude spike helped Europe’s oil producers pull European stock markets higher and lift Wall Street futures.
• There were also some stellar gains in the telecoms sector as Germany dished out new 5G mobile network licenses to some new entrants.  
• Given that oil was at five-month lows on Wednesday, people were taking precautions in case it might escalate into something more serious, CMC Markets senior analyst Michael Hewson said.

 (Source: Reuters)

• Consolidated Bakeries reported a decline in profits for the three-month period ended March 31, 2019. Net Profits ended the period at $13.58Mn (EPS: $0.06) which represents a 34.3% fall relative to the corresponding period of 2018.
• Contributing to this performance was a decline in interest and other income which fell 20.8% whilst administrative & other expenses and cost of sales experienced increases of 8.8% and of 2.1% respectively.
• The stock has risen 15.9% since the start of the calendar year. Consolidated Bakeries closed trading yesterday at $1.97 and currently trades at a P/E of 65.67x earnings which is above the Junior Market Manufacturing sector average of 25.91.

 (Source: Consolidated Bakeries Financials)

• The Barbados government said it presented holders of foreign debt with two scenarios last month and plans to launch a formal exchange offer after another round of negotiations with creditors.
• The first scenario included 14-year amortizing notes issued at 66.67% of face value. Two-year grace period with 3.5% coupon, followed by 7.5% coupon in years 3-14, semiannual payments and natural disaster clause.
• The second scenario included bond issued at par to face value maturing in 25 years, maturing in 25 years, the 15-year grace period on the principal and a natural disaster clause.
• Both scenarios “are at the limits of what is compatible with the debt sustainability framework that underpins” loan agreement with IMF. The government plans to discuss scenarios with creditors in coming weeks “with a view to adjusting the structure of the bonds to meet creditor preferences so long as they are compatible with the debt” targets agreed to with IMF.

(Source: Bloomberg)

• The government is preparing a National Industrial Policy that will seek to revive the manufacturing sector, according to Ronald Topping, the Minister of International Business and Industry. The first draft of the policy is expected to be ready by September and finalized before the end of the current financial year in March 2020.
• This is a response to the decline of the sector over the last decade based on the reduction in employment in the sector, the number of companies in the sector, the level of investment, and the contribution of the sector to GDP. The minister also noted that there are several challenges facing the sector, particularly as it relates to access to financing.
• He added that talks are ongoing between the government and local manufacturers, and there are plans for national consultation in the coming months to hear their concerns. The government is also aiming to create two new industries, particularly in ICT and pharmaceuticals.

 (Source: Barbados Today)

• Britain’s opposition Labour Party is not prepared to let Prime Minister Theresa May’s successor pursue a “disastrous” no-deal Brexit, the party’s spokesman said on Wednesday.
• The Labour Party is using a vote on Wednesday to try and seize control of the parliamentary agenda later this month to give lawmakers the chance to introduce legislation aimed at preventing the suspension of parliament or a no-deal exit.
• “Boris Johnson and a series of other Tory (Conservative) leadership candidates have made clear they are prepared to see a no-deal exit from the European Union which quite clearly, even under the government’s own assessments, would be disastrous for the British economy,” Labour’s spokesman said.

 (Source: Reuters)

• The core consumer price index, which removes energy and food costs, rose 2% from a year earlier, below forecasts, according to a Labour Department report Wednesday. The figure rose 0.1% from the prior month for a fourth-straight time and missed estimates. The broader CPI increased at an annual 1.8%, less than projected.
• U.S. stock futures briefly advanced and Treasury yields dipped as below-forecast inflation followed signs of slower economic growth that stands to bolster investor expectations for Fed rate cuts this year.
• The market-implied odds of a July cut increased after the report, with Fed funds futures now indicating almost a quarter-point of easing in the next two months.
• Lower gasoline prices played a role in keeping broader inflation tame. Energy prices fell 0.6% from the prior month and 0.5% from a year earlier as all major components in the category fell on an annual basis.

(Source: Bloomberg)