• The post-pandemic crisis and the war in Ukraine have unleashed a global inflationary wave that the countries in the CARD region have not escaped. The CARD region includes Honduras, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic. 
• According to a report by the Central American Monetary Council, as of February of this year, the Dominican Republic has the highest level of year-on-year inflation (9%), exceeding Nicaragua (7.8%), El Salvador (6.7%), Honduras (6.4%), Costa Rica (4.9%) Guatemala (3.0%) and Panama, which has the lowest rate of 2.7%. 
• Within the region, the groups “Food and Non-Alcoholic Beverages”, “Housing,” and “Transportation” have experienced the greatest effects of inflation due to the instability in fuel prices and the increases in the products of the basic basket. 
• The Dominican Republic Central Bank continues to implement its monetary normalisation plan to counteract external shocks on prices and contribute to the convergence of inflation to the target range. 
• On February 1, 2022, the Central Bank of the Dominican Republic (BCRD) ordered a 50 basis point (bp) increase in the policy rate, joining other Latin American policy-makers in confronting high inflation. This brings the policy rate to 5%. The decision marks the third consecutive rate increase for the BCRD, following a 50bp hike in November and a 100bp jump in December.

 (Source: Dominica Today)

• Fitch expects that weak job growth and rising inflation in Trinidad & Tobago (T&T) will increase social instability and public dissatisfaction with the ruling People’s National Movement (PNM) government. 
• The T&T economy experienced several severe COVID-19 outbreaks and a national state of emergency order between May and November 2021, which limited the economic recovery to an estimated 1.1% growth after contracting 7.4% in 2020. This has weakened job growth while the current Russian invasion of Ukraine has led to a spike in food and fuel prices. It is expected that these factors will increase friction within the ruling PNM government and the likelihood of public unrest in the coming quarters. 
• Inflation is expected to rise significantly in the coming months, averaging 5.5% in 2022, from 2.1% in 2021. The Russia-Ukraine conflict will most likely continue in H2 2022, which will prolong supply shortages and elevated commodity prices throughout the year. 
• Notably, Fitch Solutions revised down T&T’s Short-Term Political Risk Index (STPRI) score to 59.0, from 60.8 previously, as it continues to rank low among other Caribbean markets. However, stronger than expected job growth and increased government stimulus, and social spending pose upside risks to its view.

(Source: Fitch Solutions)

• The dollar surged to a nearly two-year high on Wednesday after minutes of the last Federal Reserve meeting reinforced expectations of multiple half percentage-point rate increases to control soaring inflation. The dollar index, which measures the greenback's value against six major currencies, climbed to 99.7780, its strongest level since late May 2020. It was last up 0.2% at 99.70. 
• Fed officials viewed the hefty rate increases as appropriate at future meetings, especially if inflation pressures intensify, minutes showed. They would also have preferred a 50 basis point rise in the target range for the federal funds rate at the March meeting. 
• Fed officials also agreed to reduce the balance sheet by $95.0Mn per month - $60.0Bn of its Treasury holdings and $35.0Bn of mortgage-backed securities - over three months, according to the minutes of the March meeting. 
• This strengthening of the US dollar poses a challenge to countries that have a heavy import bill that is denominated in USD, as this will increase the imported inflation portion of their CPI measure

(Source: Reuters)

• International Energy Agency (IEA) states agreed to tap 60.0Mn barrels of oil from storage, the director of the group said on Wednesday, on top of a 180.0Mn-barrel release announced by Washington last week aimed at cooling prices after Russia's invasion of Ukraine. 
• The move by the U.S.-allied IEA countries, which represent the 31 most industrialised countries excluding Russia, would be their second coordinated release in a month and would be the fifth in the agency's history to confront oil market outages. 
• It was the largest release from non-U.S. IEA countries on top of the largest draw from the United States. 
• Sanctions and buyer aversion have disrupted Russian oil supplies, pushing oil near $140 a barrel on March 7 despite the previous IEA release of 60.0Mn barrels, with half of that coming from the United States, about a week earlier. Russia calls its actions in Ukraine a “special operation.” 
• Markets appeared to be cheered by the latest IEA move, with Brent oil falling about 5% to about $101.50 a barrel on Wednesday. 
• The United States will match the 60.0Mn-barrel draw tapped by the other IEA countries in its 180.0Mn-barrel draw from the U.S. Strategic Petroleum Reserve announced in March. The timing of when the additional 60.0Mn barrels from non-U.S. IEA countries would come to market was not immediately clear.

(Source: Reuters)

• International Energy Agency (IEA) states agreed to tap 60.0Mn barrels of oil from storage, the director of the group said on Wednesday, on top of a 180.0Mn-barrel release announced by Washington last week aimed at cooling prices after Russia's invasion of Ukraine. 
• The move by the U.S.-allied IEA countries, which represent the 31 most industrialised countries excluding Russia, would be their second coordinated release in a month and would be the fifth in the agency's history to confront oil market outages. 
• It was the largest release from non-U.S. IEA countries on top of the largest draw from the United States. 
• Sanctions and buyer aversion have disrupted Russian oil supplies, pushing oil near $140 a barrel on March 7 despite the previous IEA release of 60.0Mn barrels, with half of that coming from the United States, about a week earlier. Russia calls its actions in Ukraine a “special operation.” 
• Markets appeared to be cheered by the latest IEA move, with Brent oil falling about 5% to about $101.50 a barrel on Wednesday. 
• The United States will match the 60.0Mn-barrel draw tapped by the other IEA countries in its 180.0Mn-barrel draw from the U.S. Strategic Petroleum Reserve announced in March. The timing of when the additional 60.0Mn barrels from non-U.S. IEA countries would come to market was not immediately clear.

(Source: Reuters)

• Mayberry Jamaican Equities Limited (MJE) reported a net profit of US $16.45Mn for its financial year ended December 31, 2021, which represents a significant improvement from the net loss of US$28.63Mn in the prior year. This performance mainly resulted from a recovery in the net gains on investments in associates and financial instruments as well as an increase in dividend income. 
• The company currently holds equities in 34 companies listed on the Main and Junior Markets of the Jamaica Stock Exchange (JSE). There was a favourable turnaround in stock prices for most of the securities in the portfolio, specifically in its top 10 stocks. Over the financial year, stocks in its portfolio saw improvements in their financial performance as the underlying entities across the financial and manufacturing industries rebounded in the last two quarters of 2021. 
• Further recovery is expected in the stock market in 2022, which should help to fuel additional gains on MJE’s portfolio. Listed companies, especially in the tourism and entertainment sectors, are set to benefit from increased demand and business activity stemming from the full withdrawal of lockdown measures. 
• Additionally, spillover effects on the agriculture and manufacturing industries, and higher private consumption should bolster growth in these industries.  However, commodity price shocks, and their impact on input costs, consumer prices, and profit margins, are major downside risks to this outlook. The rising interest rate environment and its effect on borrowing, investments, and stock valuations will also present downside risks. 
• MJE’s stock price has decreased by 0.10% since the start of the calendar year. The stock closed Tuesday’s trading session at $9.00 and currently trades at a P/B of 0.7x which is below the Main Market Financial Sector Average of 1.8x

(Source: Company Financials and NCBCM Research)

• The Caribbean Community (CARICOM) has moved a step closer to implementing a Regional Strategy for the Services Sector for which it received Ministerial approval in March. 
• When they met virtually on March 8^th in a special session of the Council for Trade and Economic Development (COTED), CARICOM Ministers who hold responsibility for the Services Sector approved SWOT analyses for nine sub-sectors. The approved SWOT analyses include seven priority sectors – Professional Services; ICT Services; Postal and Courier Services; Health and Wellness Services; Cultural and Entertainment Services, Sporting Services; Education Services; and Tourism Services. The SWOTs will now inform national and regional planning, as well as provide the basis for requests for technical and financial assistance from the international community.  
• The Ministers also approved a COVID-19 Services Sector Response Plan. The approval of the Response Plan came as the Member States were rolling back measures that were in place to reduce the spread of the virus, allowing for the safe re-opening of their economies.  
• With the decisions the Ministers took, the Services Sector is poised to be a major catalyst in CARICOM’s recovery from the COVID-19 pandemic, as well as a key vehicle through which the Region can achieve its objectives of full employment and increased standard of living. The Sector can also help the Region to deliver its commitments under the Sustainable Development Goals including poverty reduction, increased female participation in the market and good governance.

(Source: CARICOM Today)

• Being the largest project in the Stabroek Block offshore Guyana, ExxonMobil’s US$10 billion Yellowtail project, which was sanctioned recently by the government, possesses immense resources that could enhance the foundation for the global energy transition. 
• Yellowtail’s development demonstrates the successful partnership between ExxonMobil and Guyana. President of ExxonMobil Upstream Company, Liam Mallon explains that this development “helps provide the world with another reliable source of energy to meet future demand and ensure a secure energy transition.” 
• The project is expected to produce up to 250,000 barrels of oil per day after startup in late 2025, using the “One Guyana” Floating Production, Storage, and Offloading (FPSO) vessel. This massive project will be crucial to the global energy transition since ‘oil and gas’ is projected to account for 46% of the global energy demand by 2030. 
• In Guyana, ExxonMobil through its ongoing offshore exploration activities has discovered a recoverable resource of more than 10 billion oil-equivalent barrels. The company anticipates up to 10 projects on the Stabroek Block to develop this resource. ExxonMobil is working to maximise benefits for the people of Guyana and increase global supplies through safe and responsible development on an accelerated schedule. 
• Guyana continues to position itself as a key producer in the oil and gas industry, with the capacity to cushion some of the supply shortfalls on the global market. As such, the industry will continue to contribute to the country's revenue, investment opportunities, and economic growth.

(Source: Guyana Chronicle)

• Oil prices eased in volatile trade on Tuesday, pressured by a rising U.S. dollar and growing worries that new coronavirus cases could slow demand; however, losses were limited by supply concerns due to sanctions on Russia for alleged war crimes. 
• The US dollar hit its highest in nearly two years on Tuesday, boosted by hawkish comments from Federal Reserve officials who pushed for a quick reduction in the central bank’s bloated balance sheet. A stronger dollar makes oil more expensive for holders of other currencies. 
• However, demand worries mounted after authorities in top oil importer China extended a lockdown in Shanghai to cover all of the financial center's 26.0Mn people. 
• Brent futures fell 89 cents, or 0.8%, to settle at $106.64 a barrel. U.S. West Texas Intermediate (WTI) crude fell $1.32, or 1.3% to settle at $101.96. 
• “Oil prices will likely stay at around US$100 a barrel for a while amid demand concerns and an expectation for no conflict in the Middle East during the Muslim fasting month of Ramadan, but they may rise again after Ramadan and as the U.S. driving season kicks off,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

(Source: Reuters)

• Philadelphia Federal Reserve President Patrick Harker joined the chorus of central bankers warning about inflation and the interest rate hikes needed to control rising prices. 
• In remarks Wednesday, the policymaker said he is worried about an inflation rate running at its highest level in 40 years. He anticipates the Fed will respond by raising rates and reducing the level of bonds it is holding on its balance sheet. 
• “The bottom line is that generous fiscal policies, supply chain disruptions, and accommodative monetary policy have pushed inflation far higher than I — and my colleagues on the [Federal Open Market Committee] — are comfortable with,” he said. “I’m also worried that inflation expectations could become unmoored.” 
• Stocks dropped and bond yields rose following the comments. 
• The policymaker expects “a series of deliberate, methodical hikes as the year continues and the data evolve,” though he wasn’t quite as emphatic about the issue of balance sheet runoff.

(Source: CNBC News)