• Solid activity in the tourism and construction industries will drive a moderate pick-up in real GDP growth in Saint Kitts and Nevis (SKN) over the coming quarters.
• Fitch Solutions forecast real GDP growth of 2.9% y-o-y and 2.7% in 2020 and 2021, respectively, following an estimated expansion of 2.5% in 2019.
• The potential for slower than expected growth in the US poses downside risks to economic activity in SKN, given that it is the tourism industry’s largest source market.

(Source: Fitch)

• Oil prices rose on Wednesday, with Brent gaining for a seventh straight day, after a slowing of new coronavirus cases in China eased demand worries and supply was curtailed by a U.S. move to cut more Venezuelan crude from the market.
• Brent crude was up 73 cents, or 1.2%, to trade at $58.48 per barrel, while U.S. West Texas Intermediate crude gained 70 cents, or 1.3%, to trade at $52.75 a barrel.
• China, the world’s second-largest economy, has imposed city lock-downs and travel restrictions to contain a virus that has now killed more than 2,000 people, stoking concern over an economic slowdown and a hit to oil demand.
• Official data showed new cases in China fell for a second straight day, although the World Health Organization has cautioned there is not enough data to know if the epidemic is being contained.
• Brent has risen nearly 10% since falling last week to its lowest this year. The market structure is also showing signs of prompt demand for oil picking up, as the front-month Brent futures market is moving deeper back into backwardation, when near-term prices are higher than later-dated prices.

(Source: CNBC)

• At 2:40 a.m. ET, the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 1.5695%, while the yield on the 30-year Treasury bond was also higher at around 2.0125%.
• The Treasury curve remained inverted on Wednesday, with yields on three-month bills trading above yields on 10-year notes for the second consecutive session.
• The move is seen by many as a recession signal. It comes as market participants continue to assess the potential economic impact of China’s fast-spreading coronavirus.

(Source: CNBC)

• The All Jamaica Consumer Price Index was 267.5 in January 2020, resulting in an inflation rate of -1.1%, according to the Consumer Price Index (CPI) Bulletin – January 2020 released on February 17, 2020 by STATIN.
• The downward movement in January was mainly as a result of declines in the following divisions: ‘Food and Non-Alcoholic Beverages’ 1.4%, ‘Housing, Water, and Electricity, Gas and Other Fuels’ 4.0% and ‘Transport ’0.7%.
• The movement for the heaviest weighted division, ‘Food and Non-Alcoholic Beverages’ was impacted significantly by lower prices for agricultural produce resulting in a decline of 4.9% in the class ‘Vegetables and Starchy Foods’. In the ‘Housing, Water, Electricity, Gas and Other Fuels’ division, lower rates for electricity resulted in the 9.1% decline for the group’ Electricity’, Gas and Other Fuels’.
• Inflation was however tempered by a 7.2% rise in water and sewage rates which increased the index for the group ‘Water Supply and Miscellaneous Services Related to the Dwelling. For the review period, the point-to-point inflation was 5.2% (within the BOJ’s target range of 4% to 6%) while the fiscal year-to-date was 4.3%.

(Source: STATIN)

• In the latest release of results from Fontana Limited, the company reported a 21.8% increase in unaudited net profit for the six-month period ending December 2019. The net profit rose from $213.04Mn (EPS: $0.17) at the end of December 2018 to $174.90Mn (EPS: $0.15) at the end of the current period. .
• The main factors contributing to the improvement in the bottom line were revenues, which moved up 21.0% ($401.95Mn) coupled with an increase in other income of 66.4% ($11.01Mn).
• The stock has declined 4.4% the start of the calendar year and closed at $6.71 on Monday. At this price, the stock currently trades at a P/E of 24.0x earnings which is above the Junior Market Distribution Sector average of 21.9x.

(Source: Fontana’s Financials

• Fitch solutions expect a modest economic recovery in Trinidad and Tobago in 2020, with real GDP growth of 0.4% y-o-y, following an estimated contraction of -0.1% in 2019, a fourth consecutive year of recession.
• Higher levels of public spending and minor gains in investment will pave the way for T&T's economic recovery. However, weak consumption levels and poor energy exports in light of declining production and subdued global energy prices will keep growth contained.

(Source: Fitch)

• 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)