• As promised, President Donald Trump boosted tariffs on $200 billion of Chinese imports to 25% overnight as the White House seeks to extract trade concessions in the current round of talks in Washington.
• Observers of those negotiations, which continue today, said that they are not hopeful of any meaningful breakthrough.
• One industry group is warning that the higher tariffs could cost 400,000 manufacturing jobs while also putting further pressure on American farmers.
• Goldman Sachs Group Inc. said there’s a 30% chance that $300 billion of Chinese goods not yet targeted could have duties imposed on them.

(Source: Bloomberg)

• China said it will be forced to retaliate to the new tariffs, though the government didn’t immediately specify how.
• The first step was to bolster the local stock market, where the tariff escalation was met with a strong rally. The Shanghai Composite Index ended the session 3.1% higher after buying by state funds.
• Other options open to the country include a devaluation of the yuan, halting purchases of U.S. soybeans, and the nuclear option: Dumping Treasuries.

(Source: Bloomberg)

• A key measure of U.S. consumer prices rose by less than expected in April on lower used-car and apparel costs, testing the Federal Reserve’s message that muted inflation will prove transitory while giving President Donald Trump more ammunition to argue for an interest-rate cut.
• The core consumer price index, which excludes food and energy, rose 0.1% from the prior month, missing estimates, and 2.1% from a year earlier as forecast, according to a Labor Department report Friday.
• The broader CPI rose 0.3% monthly and 2% annually, with both figures less than projected.

(Source: Bloomberg)

• The Bank of Jamaica yesterday intervened in the local foreign exchange market through its [BOJ] Foreign Exchange Intervention and Trading Tool (B-FXITT).
• Approximately US$30Mn at a weighted average rate of $137.48 was sold to authorized dealers and cambios and the Bank highlighted that the flash sale was necessary to smooth temporary demand and supply imbalances in the market.
• The BOJ, in their press release, urged companies to utilize forward contracts, in the current environment where the exchange rate now moves in both directions, in order to minimize the risks associated foreign exchange obligations.

 (Source: Bank of Jamaica)

• GraceKennedy Limited (GK) has advised that further to their advisory in July 2018, that GK had entered into a joint venture partnership with Musson (Jamaica) Limited to establish a financial services company, GKMusson Limited, the Company is further advising of a name change to Canopy Insurance Limited in order to comply with certain regulatory requirements.
• “We are pleased to advised that Canopy Insurance Limited (formerly GKMusson Limited), has been granted a license by the Financial Services Commission Jamaica to provide group health and life insurance to the market,” states GK.

(Source: JSE)

• Cargo Handlers experienced a moderate decline in their profits for the second quarter of the financial year which ended March 31, 2019. Unaudited net profit for the year dipped 13.8% to $74.1Mn (EPS: $0.20) relative to the $85.9Mn (EPS: $0.23)  corresponding period of 2018. 
• This performance comes on the back of a surge in administrative expenses (+29.3%) and finance costs (+20.5%) as well as an increase in operating expenses (+15%).
• The company also recorded a $15.2Mn foreign exchange loss for the period which also adversely affected the bottom line.
• The stock has fallen 27% since the start of the calendar year. Cargo Handlers closed yesterday’ s trading at $10.95, and currently trades at a P/E of 26.71x earnings which is above the Junior Market average of 21.00x.

 (Source: Cargo Handlers Financials)

• Venezuela’s National Assembly, led by opposition leader Juan Guaido, on Tuesday, authorized an interest payment on an overdue bond, in a bid to keep the country’s crown jewel overseas asset out of creditor's hands.
• The $71Mn interest payment will be paid on state oil company PDVSA’s 2020 bond, which is backed by shares in its subsidiary, U.S. refiner Citgo Petroleum. Failure to make the payment could prompt creditors to attempt to seize up to half of the shares in Citgo.
• Venezuelan President Nicolas Maduro’s government had remained current on the 2020 bond in order to avoid losing Citgo, even as it has fallen behind on more than $9Bn in payments on other debt issued by the government and by PDVSA.
• But the latest interest payment, due on April 27, remains outstanding. PDVSA has a 30-day grace period in which to make the payment before creditors can attempt to seize the shares.

 (Source: Reuters)

• Costa Rica will see modest economic activity growth in the quarters ahead as fiscal reforms constrain private and government consumption.
• Exports and investment will rebound from lackluster growth in 2018, as a weaker currency supports export competitiveness and the Costa Rican government prioritizes infrastructure development. 
• Fitch Solutions have revised down its 2019 real GDP growth forecast to 2.9% YoY, from 3.0% previously, to reflect a slightly weaker outlook for private consumption. The agency’s 2020 forecast of 3.0% is unchanged.

(Source: Fitch)

• Iran’s threat to Europe on abandoning some of the terms of the 2015 nuclear accord was met with a cold response from European leaders this morning who said they reject any ultimatums.
• While EU leaders cited the need for more talks, they are in the thankless position of jawboning both Iran and the U.S. to take efforts to reduce tensions.
• It all looks unlikely for now after the White House issued an executive order banning the purchase of Iranian metal exports. 

 (Source: Bloomberg)

• The fate of the global economy lies in the hands of Washington and Beijing.
• That’s the view of Oxford Economics, which found that the top risk is the trade dispute damping growth. The slowdown in China and a U.S. recession ranked second and third in the Global Risk Survey.
• Since the poll of 189 businesses was conducted before the latest round of duties on Chinese goods threatened by U.S. President Donald Trump, the figures may actually understate the risk companies see.
• Bloomberg’s own economists calculate that a 25% tariff on all imports from China would shave 1.5 percentage points off U.S. growth -- a cut that would halve the rate seen in the first quarter. Trump’s backers argue the sacrifice is worth it in the context of what they see as an existential innovation war with an increasingly muscular China. 

(Source: Bloomberg)