• The Panama Canal aims to regain vessel traffic carrying U.S. liquefied natural gas (LNG) to Asia as demand in that market rises and a new reservation system allows shippers to lock in slots, following a 65% decline in the transit of its second-most important segment, the Panama Canal Authority told Reuters.
• A U.S. LNG switch to Europe in the aftermath of Russia's invasion of Ukraine, combined with long waiting times and expensive fees to transit through Panama due to severe drought, has kept many LNG ships out of the canal.
• Many gas exporters continue to take longer routes around South America even after the waterway's authority lifted the restrictions this year. The canal is the shortest route to Asia for U.S. gas exporters, whose sales to Japan, China, South Korea, and India have grown substantially in the last decade.
• "In the case of LNG, we lost 65% (of traffic), which is the traffic that now goes through Cape Horn, compared to what we had last year, two years ago," said the Canal's administrator, Ricaurte Vazquez, in an interview in Panama City.
• Europe's large appetite for U.S. LNG and delays authorizing new LNG projects in the United States have been the main drivers of the switch, he added, although the canal's drought-related restrictions also played a key role, shippers said.
• Because the Panama Canal Authority charges a set fee per passage, it can be more convenient for U.S. producers to take longer routes to Asia depending on global LNG prices, delivery terms in contracts, and seasonal demand. However, a recovery in Asian LNG demand, likely to continue next year, might require increased shipments through the canal.

(Source: Reuters)

• With inflation now only just above the Federal Reserve's 2.0% target and wage pressures easing, U.S. central bankers are widely expected to cut short-term borrowing costs next week in an effort to keep the labor market from further cooling.
• However, an uptick in underlying price pressures evident in data released on Thursday, what's likely to be a confusing monthly read on the labour market on Friday, and uncertainty over the outcome of the Nov. 5 U.S. presidential election make the road for further interest rate reductions in December and especially next year less clear.
• The year-over-year increase in the personal consumption expenditures (PCE) price index dropped to 2.1% in September from 2.3% in August, a Commerce Department report on Thursday showed. The Fed aims for 2% inflation.
• A separate report from the Labour Department showed that the broad wage-growth gauge known as the employment cost index rose 0.8% in the third quarter compared to the previous quarter, the smallest increase since the second quarter of 2021.
• The fact that wage growth eased last quarter even as the economy expanded solidly may give Fed policymakers added confidence that inflation won't resurge and a green light for interest rate cuts in their last two meetings of the year.
• The release on Friday of the Labor Department's monthly employment report is likely to show the unemployment rate held steady at 4.1% in October, economists polled by Reuters projected.
• Fed policymakers, however, are expected to take little signal from that employment data because recent hurricanes and an ongoing strike at Boeing likely subtracted as much as 100,000 jobs in the month. That impact will be seen as only temporary rather than a sudden deterioration in the labor market.

(Source: Reuters)

• British government bond prices tumbled for a second day on Thursday as investors judged finance minister Rachel Reeves' first budget would boost inflation and cause the Bank of England to cut interest rates more slowly.
• Reeves announced the biggest tax rises in three decades, saying she needed to repair the public services, alongside a big rise in borrowing to fund investment on Wednesday.
• Britain's budget watchdog said her plans would boost economic growth in the short run, but it expected inflation would average 2.6% next year compared with a previous 1.5% forecast. That prompted investors to reel in bets that the BoE would reduce interest rates rapidly over the next year.
• As a result, two-year gilt yields jumped by as much as 22 basis points to 4.539%, heading for the biggest one-day rise since August 2023, although by the close, they were only up 11 bps on the day - still the biggest daily rise in four weeks. Ten-year gilt yields hit a one-year high of 4.526% and finished the day around 10 bps higher at 4.45%.
• Investors still think the BoE is likely to cut rates next Thursday by a quarter of a percentage point. Rate futures were pricing that as a nearly 80% probability on Thursday, down from 95% before the budget.
• However, Reeves' plans sowed greater doubt about the outlook for rate cuts further ahead, with investors pricing in around 0.85 percentage points of BoE rate cuts between now and the end of 2025, down from 1.2 percentage points just before the budget. By comparison, they were still pricing almost five further quarter-point cuts from the U.S. Federal Reserve and European Central Bank - both of which have already cut borrowing costs more than the BoE.

(Source: Reuters)

• Jamaica's trade balance experienced a deterioration of 1.1%, reaching US$2,742.6Mn during the period from January to June 2024. This decline occurred despite a reduction in the overall value of imports, as the decrease in exports was more pronounced.
• For the first six months of 2024, Jamaica’s total spending on imports was valued at US$3,687.4Mn, while earnings from total exports were valued at US$944.8Mn, according to the Statistical Institute of Jamaica (STATIN).
• The value of imports over the period declined by 1.5% when compared to US$3,744.4Mn spent from January to June 2023. This decrease was largely attributable to lower imports of “Raw Materials/Intermediate Goods” and “Fuels and Lubricant”, which fell by 13.9% and 1.6%, respectively.
• The decrease in spending on "Raw Materials/Intermediate Goods" was primarily attributed to a drop in imports of 'Industrial Supplies,' 'Construction Materials,' and 'Food (including Beverages) Mainly for Industry.' Additionally, reduced imports of 'Other Fuels & Lubricants,' 'Motor Spirit,' and 'Crude Oil' significantly contributed to the decline in the import value of "Fuel and Lubricants" for the six months ending in June 2024.
• Revenues from exports were 8.4% below the US$1,030.9Mn earned in the similar 2023 period. This downward movement was due primarily to a 64.8% fall in the value of re-exports of “Mineral Fuels”. Earnings from re-exports declined to US$114.7Mn for the January to June 2024 period.
• The five primary trading partners from January to June 2024 were the United States, China, Brazil, Japan, and Trinidad and Tobago accounting for 38.5%, 8.8%, 5.0%, 4.1% and 3.2% of total imports, respectively. Import spending on goods from these countries declined by 6.3% to US$2,195.1Mn, down from US$2,341.8Mn largely driven by a 19.0% reduction in imports of "Mineral Fuels" from the USA and Trinidad and Tobago.
• On the export side, the USA (40.4), Iceland (8.4%), the Russian Federation (7.9%), the Netherlands (7.3%), and Canada (5.5%) were the top five destinations. Revenues from exports to these countries increased by 23.7% to US$657.0Mn, driven by a 76.3% rise in the value of "Crude Materials" export.

(Source: STATIN)

• The U.S. Embassy in the Dominican Republic announced the extension of Project TradeSafe (TraSa), part of the U.S. Department of Agriculture’s (USDA) Food for Progress program, for two more years, with an additional investment of approximately US$6.5Mn.
• The USDA’s Food for Progress Program supports developing countries and emerging democracies to modernize and strengthen their agricultural sectors. Its main objectives are to improve farm productivity and expand trade in agricultural products.
• More specifically, the initiative of the USDA’s Food for Progress program, implemented in the Dominican Republic by the U.S. NGO Improving Economies for Stronger Communities (IESC), seeks to facilitate trade in agricultural products by improving sanitary and phytosanitary practices and optimising the processes involved in them.
• The Director of Customs, Mr Sanz Lovatón, highlighted how the TraSa Project has been a key ally in different critical initiatives that have strengthened the export processes of Dominican products and transformed the country into a regional logistics hub.
• During the activity, the director of the TraSa Project, Mr Brian Rudert, summarized the lines of work on which the project will focus in the next two years, including strengthening capacities in risk-based inspection systems and registrations, improving coordination mechanisms such as the National Committee on Trade Facilitation and the National Committee on Sanitary and Phytosanitary Measures, as well as the improvement of capacities and surveillance mechanisms in terms of safety, among others.

(Source: Dominican Today)

• Mexican state-owned oil company, Petroleos Mexicanos (Pemex), reported a deeper third-quarter (Q3) net loss on Tuesday, October 29, hurt mostly by a weaker exchange rate even as it benefited from support from the country's new government. EBITDA generation in Q3 2024 amounted to US$4.31Bn, only slightly up (roughly 1.2%) from its Q3 2023 level.
• The company, in a filing with the Mexican stock exchange, posted a loss of around US$4.5Bn in the third quarter of 2023, but Mexico's peso currency weakened more than 13% in the year since, according to London Stock Exchange Group (LSEG) data. While Pemex mostly operates in U.S. dollars, like nearly all oil companies, it uses pesos for most of its local costs.
• .
• Revenue for the country's biggest company totalled 426 billion pesos (US$21.63Bn) during the July-to-September period, down nearly 8% year-over-year due in large part to lower crude oil export sales.
• In recent years, Pemex has sought to reduce its crude oil exports while prioritising refining. But it has mostly failed to reduce foreign motor fuel purchases in line with government targets, with gasoline and diesel import volumes consistently higher than Pemex's output.
• During the third quarter, it processed 962,000 barrels per day (bpd) of crude, up by nearly a quarter compared to the year-ago period. The quarterly performance of its refining unit yielded 278,000 bpd of gasoline and 186,000 bpd of diesel, the filing showed.
• President Claudia Sheinbaum took office at the start of this month, mostly pledging to continue generous government support for the heavily-indebted Pemex, much like her predecessor. In its filing, Pemex said it had received 145 billion pesos in assistance from state coffers during the third quarter. Furthermore, the company noted that its financial debt as at September 30, 2024, totalled $97.3Bn, down by almost $9Bn relative to the end of 2023.
• Some close to Sheinbaum have suggested she might be more open to some form of Pemex partnerships with private oil companies in a push to boost production despite the company's massive debt load. The new president has said she would target what she has described as a sustainable oil output of 1.8 million bpd.

(Source: Reuters)

• U.S. job openings dropped to more than a 3-1/2-year low in September, but nearly all the decline in vacancies was in the South, suggesting that Hurricanes Helene and Milton had temporarily weighed on demand for labour. The downbeat report from the Labour Department on Tuesday was countered by a Conference Board survey showing consumers' perceptions of the jobs market improved considerably in October, helping to lift consumer confidence to a nine-month high.
• The hurricanes and strikes by factory workers in the aerospace industry are expected to have temporarily curbed job growth in October. Economists argue that the labour market picture has not changed materially since the surge in payroll gains in September.
• Job openings, a measure of labour demand, were down by 418,000 to 7.443 million by the last day of September, the lowest level since January 2021, the Labor Department's Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report.
• Nonfarm payrolls are expected to have increased by 115,000 jobs in October after a rise of 254,000 in September, a Reuters survey of economists showed. That would be the smallest count in six months. The unemployment rate is forecast to be unchanged at 4.1%.
• In a separate report on Tuesday, the Conference Board said consumer confidence increased to a nine-month high in October amid improved perceptions of the labour market. Consumers were little worried about the Nov. 5 U.S. election.

(Source: Reuters)

• The interest rate for the most popular U.S. home loan jumped last week to 6.73%, its highest since July, adding to headwinds for the housing market, even as the Federal Reserve looks set to further lower its target for short-term borrowing costs.
• The main home-loan rate is now 60 basis points above where it was immediately after the Fed's mid-September meeting, when the central bank made an initial half percentage point cut to the policy interest rate and signaled more reductions to come.
• Mortgage rates had been falling in anticipation of the Fed's move, pumping new life into the housing market. Contracts to buy previously owned homes jumped by the most in four years in September, the National Association of Realtors reported on Wednesday. Pending sales turn into actual sales a month or two later.
• Almost immediately after the Fed's September meeting, home loan rates began climbing again, as stronger-than-expected data including a jump in spending and big job gains allayed concerns about a recession and fueled expectations that the Fed would cut rates more slowly.
• In addition, traders have been piling into bets that both inflation and interest rates could stay high if Donald Trump takes the White House and his Republican party takes control of Congress in next week's close fought elections. U.S. 10-year Treasury yields, which mortgage rates track closely, hit a nearly four-month high on Tuesday.
• Refinancing applications slumped last week, the MBA said, and now account for just 43.1% of total mortgage applications. That's below the historic median of 48%.

(Source: Reuters)

• With revenues remaining largely flat, SVL reported earnings of $1.70Bn for the nine months ending September 2024, a 17.9% decline compared to the previous year. The results largely reflect a decline of 51.8% decline in earnings in the second quarter, which was due to a one-off lottery surplus that was recorded in the prior year.
• The company estimates that it lost $1Bn in gross ticket sales due to damages sustained from Hurricane Beryl to its retail networks in Clarendon, Manchester, St. Elizabeth, and Westmoreland during the quarter. As a result, it increased by just 0.8% over the nine-month period.
• That being said, overall costs were well contained, mitigating the impact of weaker revenues on the bottom line. Direct costs, which include payouts to horse racing and agents' commissions, rose by 1.4% during the period, totaling $30.03Bn. Selling and Administrative Expenses amounted to $6.07Bn, a 1.1% year-over-year increase.
• SVL’s stock price has been on a steady downtrend since the start of the year and has fallen by 19.8% year to date. However, the sharpest declines appeared to have occurred after the release of the weaker Q2 earnings in July (see Figure 1). The stock closed Monday’s trading session at $21.74, with a P/E ratio of 28.2x, higher than the Junior Main Market Entertainment Sector average of 21.7x.
• SVL's performance may face further challenges in the current quarter as the company’s distribution network is still not fully restored. This situation could impact lottery sales and, ultimately, its overall performance.
• However, innovation continues to be a cornerstone of SVL’s growth strategy as the company actively seeks to engage the public with exciting new games, leveraging its digital channels. By continually introducing fresh and dynamic offerings, SVL aims to enhance the gaming experience, drive business growth, and capture the interest of a wider audience. This commitment to innovation is essential for staying competitive in a rapidly evolving market and should help to bolster its performance over the medium term.

(Source: JSE & NCBCM Research)

• In a move to strengthen accessibility for Caribbean travelers, Jamaica has announced a new direct flight from Nassau, Bahamas, to Montego Bay’s Sangster International Airport (MBJ). Operated by Bahamasair, this service will start on November 17, 2024, with flights scheduled twice weekly on Thursdays and Sundays.
• Minister of Tourism, Hon. Edmund Bartlett, emphasised the significance of the new route, and highlighted that this new flight within the Caribbean region marks a significant step in strengthening regional connectivity and tourism.
• The announcement ceremony on October 24 at Kingston’s Courtleigh Hotel & Suites featured key tourism leaders from both nations. Donovan White, Director of Tourism for the Jamaica Tourist Board (JTB), highlighted the flight’s potential to enhance cultural exchanges and showcase Jamaica’s unique offerings.
• Peter Mullings, Deputy Director of Tourism, Marketing, JTB, added, “Tourism plays a huge role in both our economies, and this new route presents the opportunity for more visitor arrivals, cultural exchanges, and business opportunities.”
• The new Nassau-Montego Bay route marks a milestone in Caribbean tourism, connecting two popular destinations and creating enhanced opportunities for leisure and economic growth throughout the region.

(Source: Caribbean National Weekly)