• Canada's housing market showed further signs of recovery in May following a yearlong slump, data on Thursday showed, a factor that could support additional Bank of Canada interest rate hikes.
• Canadian home sales rose 5.1% in May from April and were up 1.4% year-over-year, the first increase on an annual basis since June 2021, the Canadian Real Estate Association said. The industry group's Home Price Index edged up 2.1% on the month and was down 8.6% annually, while the national average selling price was up 3.2% on the year.
• Monthly sales gains from February through May have been helped by "a healthy job market, robust population growth, and a jolt to buyer psychology from a Bank of Canada that was previously on pause," Rishi Sondhi, an economist at TD Economics, said in a note. The data doesn't reflect the Bank of Canada's move last week to raise its benchmark interest rate to a 22-year high of 4.75%, the first hike since January.
• The central bank said that a pickup in housing activity was among the factors that showed excess demand was more persistent than anticipated. Money markets see a roughly 60% chance that it will tighten further next month.
• A lack of forced selling has contributed to a recovery in the housing market after lenders temporarily extended the period over which the debt of variable-rate borrowers is amortized, helping to shelter those borrowers from higher interest rates. On the other hand, the increase in borrowing costs has contributed to a slowdown in residential construction activity in recent months. That could thwart government plans to reduce a housing shortfall and add to the recovery in home prices.

(Source: Reuters)

• Net remittance inflows of US$3,227.6Mn declined by 0.4% in FY 2022/23 relative to the corresponding period in FY 2021/22. This decline resulted from a reduction of 1.1% or US$38.6Mn in total remittance inflows partly offset by a decline of 10.6% or US$26.2Mn in total remittance outflows. The decline, according to the BOJ, reflects a normalization of inflows to pre-pandemic levels, and more cash-in-hand remittances via tourism.
• Following the 5.1% and 0.8% increases in January and February 2023, respectively, net remittance inflows increased by 2.1% in March 2023 relative to March 2022.
• This was primarily due to the US$6.6Mn or 2.2% improvement in total remittance inflows partly offset by an increase in remittance outflows of US$0.7 million or 4.0%. The increase in gross remittance inflows reflected 16.9% growth in inflows via ‘Other Remittances’ while inflows via Remittance Companies remained flat.
• The largest source market of remittance flows to Jamaica for March 2023 continued to be the USA. Remittances from the USA accounted for 71.7% of total flows, the same ratio recorded for March 2022.
• Jamaica’s balance of payments current account benefits from the stable flow of remittances. As a result, a falloff in remittances could result in the deterioration of the current account balance in the near future. With further declines in remittance inflows via remittance companies likely as more people travel with cash in hand, and elevated consumer prices weigh on remittance flows from major source markets the current account balance will be adversely impacted. This along with the large value of imports will sustain the balance in deficit, but a strong recovery in tourism receipts will help to partially offset it. The Current Account/GDP ratio was estimated at -3.3% in 2022 and is forecasted to be -3.0% in 2023.

(Source: BOJ & NCBCM Research)

• The value of exported goods from Latin America and the Caribbean grew at an estimated rate of 2.9% year-on-year in the first quarter of 2023, after increasing by 16.4% in 2022, according to the latest edition of the Inter-American Development Bank’s Trade Trends Estimates report.
• Although the region’s trade performance was better than the world average (-2.8%), exports from Latin America and the Caribbean (LAC) entered a slowdown phase in 2022 (28.0% growth recorded in 2021 compared to 2022’s 16.4%) after the rapid recovery that followed the COVID-19 pandemic.
• The export growth rate declined steadily throughout the year and this performance was explained by the reversal of commodity prices and less dynamic export volumes
• Notably, export performance deteriorated in all the sub-regions but was most pronounced in South America. The deterioration observed in Central and South America in 2022 deepened in the first few months of 2023. In South America, exports slowed so much that they showed a contraction.
• On the flip side, Mexican exports remained on a strongly expansionary trend for much of 2022, this began to weaken in the last quarter of the year and into the first quarter of 2023. However, Mexico remained the driving force for regional trade.
• Looking ahead, the balance of risks is moderately weighted to the downside due to the impact of tight monetary policies on global growth, uncertainty surrounding the war in Ukraine, the depletion of the expansionary effect of the reopening of the Chinese economy, and the reversal of the upward trend in commodity prices.

(Source: Inter-American Development Bank)

• Latin America is increasingly seen as an attractive market for mergers and acquisitions (M&A), with the ongoing U.S.-China trade spat helping to whet investor appetite for opportunities in the region, a KPMG survey of executives showed on Monday.
• The survey of nearly 400 executives across 14 countries globally showed technology, financial services and energy sectors leading the way and Mexico overtaking regional heavyweight Brazil for the top spot in M&A activity.
• "Opportunities already outweigh challenges," said Gerardo Rojas, head of KPMG's Advisory Practice in Mexico and Central America. "The risks investors see in Latin America are outweighed by the desire to get out of Asia, particularly China, due to their trade war with the United States."
• Nearly half of the executives who took part in the study said there had never been a better time for M&A opportunities in the region, even as risks still abound.
• Notwithstanding, investors are closely monitoring regional geopolitical and economic risks and could get spooked if they see a breakdown in the rule of law, governments nationalizing private firms or a lack of incentives for foreign investment, Rojas said.
• Driven in part by its proximity to the U.S. and a nearshoring boom, Mexico was considered an attractive place to conduct business by 79% of the participants; followed by Brazil by 69% and Costa Rica by 54%, respectively. Additionally, mining powerhouses Chile and Peru could see investments in manufacturing rise.
• These investment possibilities bode well for the nations in terms of economic growth and foreign direct investments as the economies are still emerging from COVID and other global tensions.

(Source: Reuters)

• Inflation has been persistent but is projected to decline gradually as demand weakens and commodity prices moderate, provided longer-term inflation expectations remain anchored. Projections for many countries have been revised down over the forecast horizon, with upgrades primarily due to stronger-than-expected data at the beginning of 2023 more than offset by downgrades thereafter.
• After growing 3.1% last year, the global economy is set to slow substantially in 2023, to 2.1%, amid continued monetary policy tightening to rein in high inflation, before a tepid recovery in 2024, to 2.4%. Tight global financial conditions and subdued external demand are expected to weigh especially on growth across emerging markets and developing economies (EMDEs).
• Global growth could be weaker than anticipated in the event of more widespread banking sector stress, or if more persistent inflation pressures prompt tighter-than-expected monetary policy. Weak growth prospects and heightened risks in the near term compound a long-term slowdown in potential growth, which has been exacerbated by the overlapping shocks of the pandemic, the Russian Federation’s invasion of Ukraine, and the sharp tightening of global financial conditions.
• The rapid rise in interest rates in the United States poses a significant challenge to EMDEs. As a result of this, especially adverse financial market effects in EMDEs followed, including a higher likelihood of experiencing a financial crisis. The effects also appear to be more pronounced in EMDEs with greater economic vulnerabilities.
• The findings suggest that major central banks can alleviate adverse spillovers through proper communication that clarifies their reaction functions. They also highlight that EMDEs need to adjust macroeconomic and financial policies to mitigate the negative impact of rising global and U.S. interest rates.

(Source: The World Bank)

• UBS completed its emergency takeover of embattled local rival Credit Suisse on Monday, forging a Swiss banking and wealth management giant with a $1.6 trillion balance sheet.
• Marking the closing of the biggest banking deal since the 2008 financial crisis, UBS Chief Executive Sergio Ermotti and Chairman Colm Kelleher said despite challenges there were "many opportunities" for clients, staff, shareholders and Switzerland.
• The combined group will oversee $5 trillion of assets, giving UBS a leading position in key markets it would otherwise have needed years to grow in size and reach. The merger also ends Credit Suisse's 167 years of independence.
• Having peaked at more than 82 Swiss francs in 2007, the price of Credit Suisse shares has been eroded by scandals and losses in recent years and closed at 0.82 francs on Monday.
• UBS agreed on March 19 to buy Credit Suisse for a knockdown price of 3 billion Swiss francs and up to five billion francs in assumed losses in a rescue orchestrated by Swiss authorities with Switzerland's second-largest bank on the edge of collapse.
• On Friday, UBS finalised an agreement on the conditions of a 9 billion Swiss franc public backstop for losses from winding down parts of Credit Suisse's business. UBS sealed the takeover in less than three months, a tight timetable given its scale and complexity, in a race to provide greater certainty for both clients and employees. The deal, however, exposed two myths - namely, that Switzerland is a steady, predictable investment destination and that banks' problems would no longer hit taxpayers.

(Source: Reuters)

• Jamaica's expenditure on imports was valued at US$592.3Mn for January 2023, an increase of 12.2% compared to the US$528.0Mn spent during the first month of 2022. The increased spending was due mainly to higher imports of “Consumer Goods” which moved up by 21.0%, “Fuels and Lubricants” up by 15.2%, and “Capital Goods (excl. Motor Cars)” up by 21.0%.
• For the period, earnings from total exports were valued at US$185.9Mn, an increase of 52.3% when compared to the US$122.0Mn earned in January 2022. The increase in exports was due primarily to a 128.6% increase in the export of “Crude Materials (excl. Fuels)” valued at US$53.6Mn. Domestic exports in the review period amounted to US$141.0Mn, 30.7% above the US$107.9Mn recorded in January 2022. This growth was due primarily to higher exports from the Mining and Quarrying industry following the reopening of the Jamalco plant in 2022.
• The five main trading partners for January 2023 were the United States of America (USA), China, Japan, Trinidad and Tobago, and Turkey. Expenditure on imports from these countries increased by 19.1% to US$403.4Mn. This increase was due mainly to the higher imports of fuel from the USA.
• The top five destinations for Jamaica’s exports were the USA, Puerto Rico, the Russian Federation, Iceland and Latvia. Exports to these countries increased by 101.3% to US$152.0Mn mainly due to higher exports of crude materials to the Russian Federation and fuel to Puerto Rico.

(Source: STATIN)

• iCreate Limited has announced that it will no longer be proceeding with its previously announced intention to acquire Ideas Execution Limited.
• On February 3 of this year, the digital media and edu-tech firm announced that it planned to acquire 100% ownership of the branding and trade marketing company, Ideas Execution Limited.
• iCreate’s CEO Tyrone Wilson had indicated that the acquisition fits into the company's merger and acquisition strategy. However, in the same announcement noting its change in plans, iCreate said it remains committed to its growth strategy and will continue to explore opportunities for expansion in the future.

(Source: JSE)

• Figures from the Panama Tourism Authority (ATP) indicate that between January and March of this year, the entry of 786,854 visitors was reported, a figure that represents an increase of 84% compared to the data for 2022, or 360,110 additional people.
• Much of the 84% increase in the flow of visitors was the product of a greater arrival of cruise passengers to the country, a total of 188,114 travellers.
• The number of tourists, which are travellers who stay more than 24 hours in a destination, also rose. Up to March, 521,107 persons were counted, an increase of 57% compared to the movement of 2022. The number of travellers who enter the country, but stay less than 24 hours, closed the first quarter with an increase of 14%.
• Ovidio Díaz, president of the National Chamber of Tourism of Panama (Camtur), described activity during the first quarter as "good", but warned that the difference will be "drastic" when the numbers for the second quarter are known.
• Historically, the high season for Panamanian tourism ends in March or early April, and then a drop in the flow of travellers is reported at the start of the rainy season in the country. Diaz warned that it is time to work on the stabilization of the sector to reduce the gap that occurs between the changes in season and for this, he indicates that it is necessary to continue strengthening international promotion.
• Notwithstanding, between January and March, tourist spending by visitors, excluding the price of air tickets, reached $1.479 billion up 32% compared to 2022. There are anticipations that revenue volumes should exceed pre-pandemic volumes by the end of 2023.

(Source: Newsroom Panama)

• Mexico's annual inflation rate slowed in May for a fourth consecutive month to 5.84%, data from the National Institute of Statistics and Geography (INEGI) showed, beating forecasts and continuing a downward trend spurred by a long cycle of rate hikes.
• Headline inflation came in below a forecast of 5.90% and is now at its lowest since August 2021 (8.70%).
• Nonetheless, analysts say future drops in inflation may now be trickier, prompting a delay in rate cuts.
• Jason Tuvey, Deputy Chief Emerging Markets Economist at Capital Economics, expects headline inflation to fall further over the coming months. However, the strong labour market and rapid wage growth mean that inflation is likely to stay higher than most anticipate over the next couple of years. As a result, while the tightening cycle has ended, rate cuts are likely to come later and be more gradual than most anticipate.
• Banxico, as the Mexican central bank is known locally, kept the benchmark interest rate stable at 11.25% last month for the first time in nearly two years, but warned that the rate needed to stay at this level for an "extended period."
• Banxico does not expect inflation to reach its target rate of 3%, plus or minus a percentage point, until late 2024.

(Source: Reuters)