• August’s labour market data are broadly consistent with expectations of a gradual cooling in the United States (U.S.) labour market conditions through year-end. The unemployment rate edged up to 4.3% in August, from 4.2% in July, its highest level since October 2021, placing it on track to reach Fitch’s year-end forecast of 4.5%.
• The broader U-6 measure¹, which includes discouraged workers and those working part-time for economic reasons, also rose, reaching 8.1% from 7.9% in July. Nonfarm payrolls increased by just 22,000 in August, a sharp deceleration from (the upwardly revised) 79,000 in July. This slowdown reinforces the narrative of a cooling labour market. Job openings fell by 176,000 in July to 7.2Mn, marking the lowest level since September 2024 and undershooting market expectations of 7.4Mn.
• The continued softening of the labour market suggests that the Federal Reserve (Fed) is likely to lower the Federal Funds rate by 25bps at its upcoming meeting on September 17. Although Fitch expects that inflation will accelerate from 2.7% year-on-year (y-o-y) in July to 3.3% by December (partly due to tariff pass-through effects), the labour market appears to be deteriorating more rapidly than anticipated.
• This development appears to have shifted the Fed's balance of risks away from inflation and toward concerns over a more pronounced slowdown in economic activity. This shift was reflected in Chair Jay Powell’s August 22 speech at Jackson Hole, where he noted that “with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”
• Powell’s remarks have contributed to a rally in risk assets, as markets increasingly price in a more accommodative policy path. Futures markets now fully price in at least a 25bps cut in September, bringing the policy rate to 4.25%. Moreover, markets currently price in an 80% probability of an additional cut before year-end. These market expectations are broadly aligned with Fitch’s baseline view, namely the anticipation of two rate cuts this year, beginning in September, with the federal funds rate reaching 4.00% by the end of 2025.

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¹ "U-6" refers to the U.S. Bureau of Labour Statistics' broad measure of unemployment, which includes the total unemployed, plus all marginally attached workers (those who want a job but haven't looked for one recently) and all those who are working part-time for economic reasons but want to work full-time.

(Source: BMI, a Fitch Solutions Company)

• Britain said on Monday, September 8, 2025, it could cut the number of visas granted to countries that do not accept the return of migrants with no right to remain, after talks with allies, including the United States, on how to assert more control over borders.
• Britain's new interior minister, Shabana Mahmood, said counterparts from the United States, Australia, Canada and New Zealand, a decades-old intelligence-sharing partnership collectively known as Five Eyes, agreed to the principles at a meeting in London.
• Prime Minister Keir Starmer appointed Mahmood to the role on Friday in a shake-up of his government as he faces mounting public criticism over immigration and the arrival of migrants via illegal small boat crossings. "This announcement sends a clear message to anyone seeking to undermine our border security. If you have no legal right to remain in the UK, we will deport you. If countries refuse to take their citizens back, we will take action," Mahmood said in a statement.
• S. Secretary of Homeland Security Kristi Noem, who has been a leading figure in the Trump administration's crackdown on illegal immigration, said that the countries agreed to share background information on any criminal history of migrants, and work against cartels "utilising social media and technology companies to push their message". "We need to be just as aggressive in partnering together to push back on those kinds of new developments," she told reporters on the sidelines of the meeting.

(Source: Reuters)

• On June 13, 2025, CariCRIS reaffirmed the issuer ratings of GraceKennedy Limited (GKL) at CariA for both local and foreign currency on the regional scale, and jmAA on the Jamaica national scale. The Group’s bond issue of up to J$3Bn was rated CariA (Local Currency Rating) on the regional rating scale and jmAA (Local Currency Rating) on the Jamaica national scale. A stable outlook was assigned, reflecting no immediate expectations for rating changes.
• Factors that could lead to an upgrade in ratings on GK include an improvement in the creditworthiness of the Government of Jamaica, along with stronger financial performance by GKL. Specific metrics include a profit after tax (PAT) margin of 5.5% or more, an operating profit margin of at least 7.5%, and a return on assets (ROA) above 5%, all sustained over two consecutive years. That said, for the financial year ended December 31, 2024, GK’s PAT and operating margins amounted to 5.3% and 7.5%, respectively, while ROA stood at 16.2%.
• Conversely, the ratings may be downgraded if there is a significant and sustained decline in revenue, specifically, more than 10% over two years, or if the operating profit margin falls to 5.0% or lower. Additional risks include trade disruptions or tariff increases that could cause the gross profit margin to fall below 35%.
• A decline in the parent company’s debt service coverage ratio (DSCR) to below 1.33x; an effective Debt-Service Coverage Ratio (DSCR) below 1.5x; a Debt to EBITDA ratio above 4.0x, and a deterioration in the Government of Jamaica’s creditworthiness are all factors that would negatively impact the ratings.

(Source: CariCRIS)

• Brazil's Treasury on Tuesday made its third foreign debt sale of the year, marking the first time since 2014 that Latin America's largest economy has conducted more than two external bond sales in a single year.
• The country launched a new 30-year note and reopened an existing five-year benchmark, the Treasury said in a statement, lauding the transaction as "successful" and a sign of investor confidence in its economic management.
• The operations were aimed at boosting liquidity in Brazil's dollar yield curve abroad, providing benchmarks for corporate issuers, and pre-financing upcoming foreign currency debt maturities.
• The new 30-year benchmark had a yield of 7.5%, but the Treasury said it would disclose only on Wednesday the amount raised. News service IFR reported that the transaction reached $1 billion. The reopening of the five-year sovereign bonds, meanwhile, totaled $750 million at a yield of 5.20%, the Treasury said.
• Brazil had already tapped global markets this year with a $2.5 billion sovereign bond sale in February and a $2.75 billion issue in June.

(Source: Reuters)

• Panama's President Jose Raul Mulino announced the start of a process to develop a new gas pipeline interoceanic energy corridor for the canal during an official visit to Japan, the Panama Canal said in a statement on Wednesday.
• The pipeline will be the first major project of this infrastructure platform, aimed at strengthening the country's competitiveness and addressing a strategic need in the global energy market, the statement added.
• The Panama Canal board has authorised the selection process, with prequalification of interested parties expected to begin this year and the final concessionaire would be chosen by the fourth quarter of 2026, the waterway's administration added.
• The project is part of the revenue diversification strategy for the Panama Canal, which seeks to expand service offerings, increase cargo capacity without additional water use, and aims to position Panama as a key global trade hub.

(Source: Reuters)

• Several Federal Reserve officials said labour market worries continue to animate their belief that rate cuts still lie ahead for the central bank. “I've been clear that I think we should be cutting at the next meeting,” Federal Reserve Governor Christopher Waller explained that “You want to get ahead of having the labour market go down because usually when the labour market turns bad, it turns bad fast," he said.
• Atlanta Fed President Raphael Bostic also reiterated his view that a rate cut is in the cards although he did not say how soon it might happen. He added, "While price stability remains the primary concern, the labour market is slowing enough that some easing in policy, probably on the order of 25 basis points, will be appropriate over the remainder of this year."
• Minneapolis Fed leader Neel Kashkari said with the neutral fed funds rate around 3%, “that suggests that interest rates have some room to come down gently over the next couple of years." The official also declined to say when he believes the Fed should cut rates, given the uncertainties created by trade policy.
• The Fed’s meeting later this month is viewed by investors as a lock for a quarter percentage point cut in what is now a 4.25% to 4.5% federal funds interest rate target range. The market’s confidence is rooted in comments made by Fed Chair Jerome Powell late last monthat the Kansas City Fed’s Jackson Hole, Wyoming research conference when he said, “with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”
• In weighing a rate cut, Fed officials are trying to balance their legally mandated mission of keeping inflation low and the job market as strong as it can be without creating price pressures. At the same time, a wide range of data indicates the labour market is weakening, and that is driving some at the Fed to focus more on the jobs side of their mandate.
• The officials’ worry about the labour market was to some degree backed up by a government report released on Wednesday that showed moderate hiring and a declining number of job openings. The Job Openings and Labour Turnover Survey, or JOLTS report, showed openings dropped 176,000 to 7.181 million by the last day of July, a lower rate than economists had expected.

(Source: Reuters)

• A surge in new business helped Britain's services sector to grow by the most in more than a year last month as concerns about U.S. tariffs eased, but firms remained worried about the prospect of tax rises at home.
• The S&P Global Purchasing Managers' Index for Britain's services sector rose to 54.2 in August from 51.8 in July, reaching its highest level since April 2024. The figure was above a preliminary reading of 53.6 and comfortably exceeded the 50 mark, which divides growth from contraction.
• The composite PMI - which includes Monday's downwardly revised manufacturing PMI - rose to a 12-month high of 53.5 from 51.5 in July and an initial August reading of 53.0. The upbeat data is likely to relieve finance minister Rachel Reeves as she looks ahead to her autumn budget. Many businesses blame her decision to hike their social security contributions in last year's budget for weak demand and higher costs.
• Firms reported the biggest increase in costs in three months and continued to reduce staff numbers. Employment as measured by the PMI has fallen for 11 consecutive months - the longest continuous period since a run between 2008 and 2010 aside from the COVID-19 pandemic.
• Although Britain's economy grew faster than elsewhere in the G7 in the first half of this year, much of that reflected higher government spending and a temporary boost to exports as businesses sought to avoid some U.S. tariffs. The PMI's measure of new business in the services sector saw its biggest one-month gain since March 2021, reflecting stronger consumer demand and the first rise in exports since April.
• Expectations for future business volumes were also boosted by lower borrowing costs and reduced fears over U.S. tariffs. "However, many service providers still commented on elevated government policy uncertainty and worries about forthcoming tax-raising measures expected in the autumn Budget," Moore said.

(Source: Reuters)

• Japanese corporate spending on plant and equipment climbed 7.6% y/y in Q2 (Apr-Jun), but the outlook for business investment has clouded as manufacturers' profits slide on pain caused by U.S. tariffs.
• On one hand, the healthy rise in capital expenditure supports the case for the central bank to raise interest rates again later this year. The same finance ministry data also showed, however, that while overall, recurring profits increased 0.2%, they tumbled 11.5% for manufacturers, led by a 29.7% plunge for automakers.
• Economists noted that exporters have so far absorbed higher U.S. tariffs by cutting prices, but sustained margin pressure could weigh on future investment. Preliminary GDP data showed 1.0% annualised growth in Q2, but revised figures due Sept. 8 are now expected closer to 0.8% as capex estimates are adjusted lower.
• Risks loom in Q3, with July exports logging their steepest drop in four years and industrial production dragged by a 6.7% fall in auto output.
• A Japan- U.S. trade deal in July is expected to lower auto tariffs to 15% from 27.5%, though the timing remains uncertain pending U.S. presidential approval.

(Source: Reuters)

• Global stocks fell and long-dated bond yields in Europe hit multi-year highs on Tuesday as investors grew increasingly worried about the state of finance in countries around the world.
• U.S. indices closed lower, with the Dow Jones down 0.55%, S&P 500 off 0.7%, and Nasdaq falling 0.8%.
• Meanwhile, European bond markets saw sharp moves, with France’s 30-year yield at 4.5% (16-year high), Germany’s at 3.4% (14-year high), and UK gilts at their highest since 1998, as investors looked warily ahead to the government's autumn budget plans.
• French Prime Minister Francois Bayrou looks set to lose a confidence vote as opposition parties balk at his cuts to government spending, while British finance minister Rachel Reeves is expected to raise taxes in her autumn budget to remain in line with her fiscal targets.
• "Global bond markets are starting the month with a nervous glance towards upcoming government budget discussions in the U.S. and in Europe," Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute.
• Bond yields move inversely to prices and yields, especially on super-long-dated 30-year bonds, have been soaring around the world, with investors concerned about the scale of debt in countries from Japan to the United States.
• Kenneth Broux, head of corporate research FX and rates at Societe Generale, noted that "the flurry of new primary issuance that awaits investors in the coming days and weeks threatens to exacerbate the global selloff in the long end.

(Source: Reuters)

• President Luis Abinader announced that the Dominican Republic is now the second country with the highest air connectivity index in Latin America, growing from 878 to 1,096 air routes between 2020 and 2025, thanks to the Open Skies policy.
• He emphasised that aviation is projected to contribute US$15.0Bn in direct and indirect revenue by the end of 2025, representing 11.0% of the national GDP in tourism-related contributions. The sector is also expected to create over 40,000 direct jobs and more than 540,000 indirect jobs.
• Abinader credited this progress to coordinated efforts by the Civil Aviation Board (JAC), the Dominican Civil Aviation Institute (IDAC), the Airport Department (DA), and the General Directorate of Customs (DGA).
• Recent reforms, including Laws 57-23 and 17-24, have strengthened the aviation framework with tax incentives, regulations for drone operations, improved navigation systems, and expanded training programs.
• As at 2025, the country hosts 365 active airlines—13 of them domestic—marking a 365% increase in available seats for Dominican carriers. Airlines like Arajet and Sky High Aviation have expanded connectivity to 414 destinations across 75 countries.

(Source: Dominican Today)