• In the Bahamas, a debate between the ruling Progressive Liberal Party (PLP) and the opposition Free National Movement (FNM) parties has started as a result of different proposals to regulate banks in the country. Banking regulation became a hot topic of political debate after different social groups complained about excessive charges levied by banks to customers.
• FNM leader Michael Pintard seized the moment to say that if his party wins the next election, it will implement sweeping reforms to the banking industry geared towards “making it more cost-efficient … and truly serving Bahamians”. He added that while the FNM will not propose any measure that undermines the viability of the sector, it is concerned about unchecked fee increases that are not related to better service or improved access to financial services.
• The FNM proposes to strengthen the regulatory mandate of the Central Bank to validate fees and streamline banking protocols. The goal would be to lower costs and make the system more inclusive and competitive, with the entry of qualified Bahamians seeking commercial banking licenses.
• Pintard also said that banks should expand their presence in the Family Islands, which are currently underserved. However, some members of PM Philip Davis’ administration have expressed similar concerns, especially Foreign Affairs Minister Fred Mitchell who suggested more government regulation.
• Bahamas Clearing Banks Association (and Fidelity Bank chairman) Gowon Bowe reacted by saying that regulating bank fees “is a slippery slope … the country would be moving towards communism”. He suggested that any serious banking reform proposal should require a prior empirical analysis to assess the impact of the changes. Last year, Central Bank Governor John Rolle said that capping fees would create problems if the structural problems of the banking system were not tackled first.

(Source: Oppenheimer)

• U.S. business activity fell to a 4-month low in August and firms continued to struggle to pass on higher prices to consumers, bolstering the likelihood that inflation will stay on a downward trend over the coming months.
• S&P Global said on Thursday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, edged down to 54.1 this month, following a final reading of 54.3 in July. This level is still healthy and is among the highest measured over the past two years. A reading above 50 indicates expansion in the private sector.
• A slight pick-up in the services sector was outpaced by an easing in the manufacturing industry. Average prices charged for goods and services rose at the slowest rate since January and are now at levels that S&P Global viewed as consistent with the Federal Reserve's 2% inflation target.
• Inflation in July on an annual basis slowed to below 3% for the first time in nearly 3-1/2 years, the Labour Department reported last week. The nearly unchanged composite PMI implied that economic activity remained on a solid footing as the third quarter progressed. Gross domestic product increased at a 2.8% annualized rate in the second quarter, picking up from the January-March quarter's 1.4% pace.
• The S&P Global survey's measure of new orders received by private businesses edged up to 52.3 from 52.2 in July. Its measure of prices paid by businesses for inputs was unchanged at 58.0, but the survey's gauge of prices charged slipped to 52.8 from 53.1 in July. Private sector employment fell, with a decline in the service sector, accompanied by the manufacturing sector, which added the fewest jobs since January.
• The survey's flash manufacturing PMI, an early estimate of manufacturing PMI, retreated to an 8-month low, falling to 48.0 this month from 49.6 in July. Economists polled by Reuters had forecast the index for the sector, which accounts for 10.3% of the economy, to remain unchanged.
• Its flash services PMI, rose to 55.2, from 55.0 in July, confounding economists' expectations for a drop to a reading of 54.0. S&P Global said sentiment about the future continued to be adversely impacted by uncertainty regarding the November presidential election and concerns about future demand, particularly in the manufacturing sector.

(Source: Reuters)

• European Central Bank policymakers saw no urgency in cutting interest rates last month but hinted at a fresh discussion in September as high rates take a toll on growth, the accounts of their July 17-18 meeting showed on Thursday.
• The ECB left rates unchanged at that meeting and gave almost no hint about its future policy moves but the accounts reveal concerns about restricting economic growth too much and show increasing comfort that bringing euro zone inflation down to the 2% target was on track. The ECB was among the first major central banks to cut rates in June and Eurozone economic data in the past six weeks have largely supported the case for further easing.
• Growth in negotiated wages, a key metric to gauge future price pressures, slowed sharply in the second quarter, while economic growth has been anaemic with Germany, the bloc's biggest economy, skirting a recession. That is why markets now see a more than 90% chance of a 25-basis-point rate cut next month, followed by at least another step this year, possibly in December.
• "While there could still be upside surprises to wage growth later in the year, today’s wage growth reading makes a September cut by 25bp even more likely," ING economist Bert Colijn said. The ECB has long been concerned about rapid wage growth but the accounts suggest that policymakers are becoming more relaxed.
• "It was comforting to see that domestic cost pressures from high wage growth, including in the services sector, had been increasingly buffered by unit profits," the accounts showed. Policymakers also thought that inflation was well on its way back to target and inflation was progressing along its long-outlined criteria, putting price growth back at 2% by the end of next year.

(Source: Reuters)

• Ground has been broken for the Boundbrook Urban Centre in Port Antonio, Portland, which is set to provide a major economic boost for the coastal town. The facility will sit on 6.68 acres of land at a total development cost of $4.2Bn and is expected to generate thousands of jobs for parish residents.
• It is being spearheaded by the Factories Corporation of Jamaica (FCJ) with equity partners National Commercial Bank (NCB) and Barita and financed by CIBC.
• Similar to the Morant Bay Urban Centre, which is still under construction, the Boundbrook facility will serve as a centre for commerce and entertainment. It will accommodate government offices, educational institutions, financial services and private-sector businesses including fast food and fine dining restaurants, gaming venues, medical centres, business process outsourcing firms, legal practices, beauty salons, and more.
• Prime Minister, the Most Hon. Andrew Holness, who delivered the main address at the ground-breaking on Wednesday (August 14), noted that the project will offer a myriad of benefits to the people and visitors of Portland, thus transforming the parish. He pointed to similar projects in the pipeline for development in Falmouth, Negril, Old Harbour, and Hopewell.
• For his part, FCJ Chairman, Lyttleton Shirley, revealed that take-up for the project now stands at 110%, expressing confidence that it will be a “one-stop shop offering the services of the government and private sector in one location, while adhering to all concerns of our residents.”
• Minister of Science, Energy, Telecommunications and Transport and Member of Parliament for Portland Western, Hon. Daryl Vaz, welcomed the 3,000 jobs projected to be generated from the project. Member of Parliament for Portland Eastern, Ann-Marie Vaz, called on the young people of the parish to ready themselves for the employment opportunities that will come by upskilling and getting certified.
• “Now is the time to upskill [and] the time to get certified, as this development is already providing jobs and will bring hundreds more during construction and afterwards, with new and expanded businesses that will be operating here,” Mrs. Vaz said.

(Source: JIS)

• In a significant move to bolster the nation’s healthcare system, Guyana’s Minister of Health Dr. Frank Anthony, accompanied by Acting Chief Medical Officer Dr. Jeetendra Mohanlall, met with representatives from the College of the North Atlantic (CNA) and their new partner, Team Broken Earth, on Tuesday, August 20.
• The meeting took place at the Ministry’s Brickdam Headquarters and focused on exploring future collaboration opportunities to enhance healthcare services in Guyana. Ms. Elizabeth Vinecent, Associate Vice President of CNA, led the delegation, which also included officials from the Canadian institution.
• CNA has been actively involved in Guyana through its participation in the Skills to Access the Green Economy (SAGE) project, a development initiative under the Canadian High Commission that focuses on educational and workforce development in the country.
• With recent additional funding, CNA has expanded its reach by partnering with Team Broken Earth, a Canadian medical volunteer organisation renowned for providing critical medical care in underserved regions.
• This partnership aims to leverage both organisations’ expertise to address healthcare challenges in Guyana, potentially bringing advanced training and resources to local medical professionals.
• The meeting marks a pivotal step in ongoing efforts to strengthen the healthcare system in Guyana, aligning with broader initiatives to improve access to quality medical services and enhance the overall health and well-being of the population.

(Source: Guyana Chronicle)

• The Dominican Republic (Dom Rep) said it will create a state mining firm to explore and exploit the nation's key mining resources, including rare earth minerals.
• The Dominican presidency said in a statement that the state firm, Empresa Minera Dominicana S.A., or Emidom, will explore, exploit and run economic viability studies on the country's natural resources.
• The firm will be able to negotiate contracts and alliances with international firms and have a nine-member board, led by the minister of the presidency. Emidom is also tasked with managing the Avila mining reserve in southern Pedernales province, which borders Haiti and in 2018, was declared an area to be explored for possible rare earth projects.
• Rare earths are a group of 17 elements, all but one of which appears on the U.S. Geological Survey's list of 50 “critical minerals,” meaning they are economically important. If exploration leads to any discovery for Dom Rep, this could lead to further economic gains for the nation. The Dominican Republic already boasts GDP growth of 2.4% in 2023 and a 5.4% projected growth for 2024 supported by sound economic, fiscal, and financial policies, and favourable external conditions (strong inflows of travel receipts and remittances).
• Rare earths aside, Dom Rep is home to Canadian firm Barrick Gold's Pueblo Viejo, the largest gold mine in Latin America and the Caribbean.

 (Sources: Reuters & NCBCM Research)

• The Federal Reserve (U.S. Fed) appears to be very much on track for an interest rate cut in September after a "vast majority" of officials said such an action was likely, according to the minutes of the U.S. central bank's July 30-31 meeting. The minutes, which were released on Wednesday, even showed some policymakers were willing to reduce interest rates at last month's gathering.
• The policy-setting Federal Open Market Committee (FOMC) of the U.S. Fed left its benchmark interest rate unchanged in the 5.25%-5.50% range on July 31. However, it opened the door to a cut at the Sept. 17-18 meeting. Financial markets have been expecting the September meeting to kick off the Fed's policy easing, with a total of as much as a full percentage point worth of rate cuts expected by the end of this year.
• At the July meeting, most policymakers thought that "if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting," the minutes said.
• They also noted that "many" Fed officials viewed the stance of rates to be restrictive and "a few participants" contended that amid an ongoing cooling in inflationary pressures, no change in rates would mean that monetary policy would increase the drag on economic activity.
• While all Fed officials were on board with keeping rates steady in July, the minutes revealed that "several" policymakers said progress in lowering inflation amid a rise in joblessness "had provided a plausible case" for a quarter-percentage-point cut in July, "or that they could have supported such a decision" had it been on the table. The minutes also showed that a dwindling camp of policymakers feared a premature easing in monetary policy could restart inflation.

(Source: Reuters)

• U.S. employers added far fewer jobs than initially reported in the year through March, the Labor Department said on Wednesday. This revision underscores the growing concerns the Federal Reserve has about the health of the labour market as it gears up to start cutting interest rates in September.
• The department's estimate for total payroll employment from April 2023 to March 2024 was lowered by 818,000. This represents a 0.5% downward change and means that monthly job gains during the period averaged roughly 174,000, compared to the previously reported figure of 242,000.
• If the tally holds through the final revision in February, it would be the largest downward revision since the 902,000 reductions to employment in March 2009. It also chimes with the view of some economists that data-gathering issues mean the strong job gains previously reported have been systematically overestimated.
• Private employment growth was revised down by 819,000, or 0.6% below previous estimates by the department. The professional and business services category saw the biggest reduction in jobs, shedding 358,000, or 1.6%, from the prior estimate, followed by leisure and hospitality at 150,000 jobs, down 0.9%. The hard-pressed manufacturing sector saw a reduction of 115,000 jobs, also down 0.9%. Government employment was unchanged.
• The few sectors that saw upward revisions included private education and health services, up 87,000, or 0.3%; transportation and warehousing, up 56,400, or 0.9%; and utilities, up 1,700, or 0.3%. The revisions suggest government and private employers had about 157.3Mn workers on their books in March on a seasonally adjusted basis, down from about 158.1Mn as previously reported.

(Source: Reuters)

• At its meetings on August 16 and 19 2024, the Monetary Policy Committee (MPC) unanimously agreed to reduce the policy rate by 25 basis points (bps) to 6.75%, effective Wednesday, 21 August 2024. Since November 2022, the BOJ has maintained the rate at 7.00%, following an aggressive hiking cycle when it raised its policy rate by 650 bps between September 2021 and November 2022 to tame a sharp rise in inflation.
• The reduction in the policy rate occurs mere days after the business community's appeal for rate cuts to mitigate the anticipated economic downturn resulting from the ongoing effects of Hurricane Beryl.
• With headline inflation becoming more anchored in the BOJ’s target range of 4.0% to 6.0%, it created room for a change in the interest rate cycle. Inflation has fallen within the Central Bank’s target range for five months consecutive and is projected to largely remain within the target range over the next two years.
• However, the MPC anticipates a temporary uptick in headline inflation over the next 3 to 5 months in the aftermath of Hurricane Beryl. According to the Government of Jamaica, domestic fiscal policy will tackle post-hurricane recovery by using existing savings and insurance, along with re-prioritizing expenditures. In this light, the Committee believes that fiscal policy will not pose a risk to inflation in the near term.
• The MPC’s view is that economic conditions generally support the prospect of a low, stable, and predictable inflation outlook. Local inflation has been supported by a stable USD to JMD exchange rate, favourable international commodity prices and slowing inflation in the United States.
• While the inflation outlook appears balanced, escalating international shipping costs, a more severe-than-expected impact from Hurricane Beryl and additional adverse weather conditions could contribute to an increase in inflation. 
• Any future monetary policy decisions to further reduce interest rates will continue to depend on incoming inflation data.
• With its move yesterday, the BOJ joins central banks in Latin America that began cutting their policy rates as inflationary pressures have eased and have done so ahead of the US Federal Reserve, which is widely expected to cut rates when it meets in September.

(Source: BOJ, NCB Capital Markets Limited)

• First Rock Real Estate Investments Limited (FIRSTROCK), through its wholly-owned subsidiary First Rock Capital Cayman Ltd. entered an agreement to acquire a commercial property in George Town, Grand Cayman containing units leased to multiple tenants.
• This forms a part of the company’s strategy to double down on the more lucrative commercial side of the real estate market. Earlier this year, the company noted that most of the projects in its pipeline were commercial.
• Moreover, while the company has numerous commercial projects in the pipeline locally, it continues to be optimistic about various prospects throughout Central America and the Caribbean.
• First Rock Real Estate Investments Limited reported a net loss attributable to shareholders totaling US$779.1Mn (a loss per share (EPS) of US$0.003) for the first half of 2024. Unrealised foreign exchange losses from translating assets denominated in Costa Rican colones and Jamaican dollars, totalling US$203.14Mn for the period were the primary contributors to the company’s performance.

(Source: JSE)