• Guyana and the Dominican Republic are making progress on accords for offshore oil and gas exploration and to build a fertilizer plant and potentially a refinery in the South American country, President Luis Abinader said on Tuesday.
• The countries signed a memorandum of understanding in 2023 to work on energy projects.
• The Caribbean country is interested in exploring Guyana's Berbice offshore block, which might require a new delimitation of the area originally explored by a unit of Toronto-listed CGX Energy and ultimately returned to the government.
• A potential new refinery in Guyana is also among the interests of both governments, but a final agreement is pending. The Dominican Republic has a state-owned refining company, Refidomsa. Guyana is also pressing a consortium led by Exxon Mobil, which controls all oil and gas output in the country, to deliver natural gas to shore from its floating production facilities to feed power generation, petrochemical and liquefied natural gas (LNG) projects that could expand revenue.

(Source: Reuters)

• San Francisco Federal Reserve Bank President Mary Daly on Tuesday said that while there is no reason to be discouraged about bumpy and sometimes imperceptible progress toward 2% inflation, the U.S. central bank should keep short-term borrowing costs where they are until the progress is more visible.
• "Policy needs to remain restrictive until ... I see that we are really continuing to make progress on inflation," she told a community banking conference hosted by the American Bankers Association in Phoenix, Arizona. With the economy and labour market solid, "we want to be, in my judgment, careful ... before we make the next adjustment" to ensure there is enough downward pressure on inflation, she said.
• The U.S. central bank left its policy rate in the 4.25%-4.50% range at its meeting last month. It is expected to keep it there for another couple of meetings as policymakers watch the economic data and begin to assess how the Trump administration's tariff, immigration, tax and other policies may affect inflation and unemployment.
• Those policies, Daly said, could boost or slow economic growth, labour supply and inflation, depending on the details and their "scope, magnitude, and timing." Inflation as measured by 12-month change in the personal consumption expenditures price index, which the Fed targets at 2%, ended last year at 2.6%, with some analysts estimating it may have fallen to 2.4% last month.
• Daly's view that rates ought to stay where they are appeared to be in sync with that of one of the Fed's most hawkish policymakers, Fed Governor Michelle Bowman, who told the same group on Monday that she wants "to gain greater confidence" that inflation will continue to drop before cutting interest rates any further. The deluge of executive orders and policy pronouncements from the Trump administration is creating a lot of uncertainty, Daly noted.

Source: (Reuters)

• British pay growth accelerated in late 2024, according to data that suggested the jobs market was holding up and underscored why the Bank of England has been cautious about cutting interest rates, despite a weak overall economy.
• Private-sector pay excluding bonuses - the BoE's main gauge of domestic inflation pressure - rose by 6.2% compared with the same period a year earlier, the fastest pace in a year, the Office for National Statistics said.
• The sterling rose against the dollar and investors trimmed their bets on the pace of future BoE rate cuts following the release of the official data, which painted a less weak picture of the labour market than some recent surveys. Still, ING economist James Smith said that could change. "Redundancy levels are low, but the major risk is that begins to change ahead of tax hikes in the spring. A cooler jobs market should help wage growth come gradually lower as the year goes on," he said.
• Employers say finance minister Rachel Reeves' plan to boost the social security contributions they pay from April - when Britain's minimum wage is also due to rise by almost 7% - will reduce hiring and wage growth. However, the pace of pay increases has remained far above levels consistent with the BoE's 2% inflation target.
• BoE Chief Economist Huw Pill told Reuters last week that he believed the main problem for Britain's sluggish economy remained one of supply - including a shortage of workers. The ONS said pay across the whole economy, excluding bonuses, was 5.9% higher in the fourth quarter than a year earlier. This was the strongest reading since the three months to April 2024.
• Including bonuses, pay was up by 6.0%, its fastest since the end of 2023. However, the BoE expects pay increases to slow soon as weakness in the economy weighs on the labour market.

(Source: Reuters)

• British pay growth accelerated in late 2024, according to data that suggested the jobs market was holding up and underscored why the Bank of England has been cautious about cutting interest rates, despite a weak overall economy.
• Private-sector pay excluding bonuses - the BoE's main gauge of domestic inflation pressure - rose by 6.2% compared with the same period a year earlier, the fastest pace in a year, the Office for National Statistics said.
• The sterling rose against the dollar and investors trimmed their bets on the pace of future BoE rate cuts following the release of the official data, which painted a less weak picture of the labour market than some recent surveys. Still, ING economist James Smith said that could change. "Redundancy levels are low, but the major risk is that begins to change ahead of tax hikes in the spring. A cooler jobs market should help wage growth come gradually lower as the year goes on," he said.
• Employers say finance minister Rachel Reeves' plan to boost the social security contributions they pay from April - when Britain's minimum wage is also due to rise by almost 7% - will reduce hiring and wage growth. However, the pace of pay increases has remained far above levels consistent with the BoE's 2% inflation target.
• BoE Chief Economist Huw Pill told Reuters last week that he believed the main problem for Britain's sluggish economy remained one of supply - including a shortage of workers. The ONS said pay across the whole economy, excluding bonuses, was 5.9% higher in the fourth quarter than a year earlier. This was the strongest reading since the three months to April 2024.
• Including bonuses, pay was up by 6.0%, its fastest since the end of 2023. However, the BoE expects pay increases to slow soon as weakness in the economy weighs on the labour market.

(Source: Reuters)

• After a first-quarter dip and modest second-quarter growth, Lasco Distributors Limited (LASD) experienced an 18.50% decline in profits for its third quarter ending December 2024 (Q3 2025) to $329.53Mn due to higher operating expenses and a reduction in “other operating income”. Subdued earnings in Q1 and Q3 meant that LASD’s earnings were down for the nine months ended March 2025. The overall performance was weighed down by higher operating expenses. 
• In Q3, LASD’s earnings declined, despite a 5.7% rise in revenues to $7.73Bn. This growth was fueled by gains across all business divisions of the Company as demand for its portfolio continues to grow given the initiatives targeting its Pharmaceutical Business and the expansion of its export markets. Costs of sales also rose 6.6%, resulting in only a marginal increase in gross profit (+1.7%).
• This gross profit increase did not translate to year-on-year net profit improvement. Increased costs related to sales and promotions, employee expenses, technology upgrades, and depreciation pushed operating expenses higher by 2.26%. Additionally, financing costs surged (from $0.122Mn to $7.21Mn), further weakening its performance.
• As a result, LASD reported lower Q3 net profits of $329.53Mn (-18.5%), which, contributed to 9M net profits of J$1.05Bn (-12.5%).
• Despite the decline in performance, in the short term, the company plans to implement contingency measures to improve inventory levels, while mitigating the effects of supply challenges to meet demand. These actions, combined with disciplined cost management, could drive future topline growth and improve profitability. LASD also remains committed to its investment and growth strategies, which emphasize portfolio innovation, expanded capabilities, and stronger consumer communication and engagement.
• LASD’s stock price has appreciated marginally (0.47%) since the start of the year, closing Monday’s trading session at $4.31. Currently, the stock trades at a P/E ratio of 11.6x, below the Main Market Manufacturing and Distribution Sector average of 14.3x.

(Sources: JSE & NCBCM Research)

• Consumer prices fell 0.3% in January 2025, with the All-Jamaica Consumer Price Index (CPI) falling from 143.5 in December 2024 to 143.1 in January 2025.
• This downward adjustment was primarily driven by a 1.3% reduction in the heavily weighted index for the division ‘Food and Non-Alcoholic Beverages’, influenced mainly by a 7.4% fall in the ‘Vegetables, tubers, plantains, cooking bananas and pulses’ class. Lower prices for some agricultural produce, as production improved, was the primary driver of the falloff in this subgroup.
• Also contributing to the downward movement in the CPI for January was a 0.3% decline in the index of the ‘Housing, Water, Electricity, Gas and Other Fuels’ division due to lower electricity rates which led to a decline in the ‘Electricity, Gas and Other Fuels’ group.
• Reflecting the lower consumer prices during the month, the point-to-point inflation rate for January 2024 to January 2025 declined to 4.7% from 5.0% in December. The divisions making the largest contribution to the point-to-point inflation rate were ‘Food and Non-Alcoholic Beverages’ (+7.4%), ‘Housing, Water, Electricity, Gas and Other Fuels’ (+2.0%), and ‘Restaurants and Accommodation Services’ (+6.2%).
• The latest CPI reading continues to support the Bank of Jamaica’s (BOJ’s) expectations that inflation will remain anchored within its target range of 4%-6% over the next eight quarters. The BOJ’s stable inflation outlook supported its 25 basis points (bps) cut to 6.00% on December 20^th. The next policy decision will be on the 20th of February and the market expects an additional 25bps cut.

(Sources: STATIN & NCBCM Research)

• According to the Eastern Caribbean Central Bank (ECCB¹), the Eastern Caribbean Currency Union (ECCU) saw notable growth in 2024, and is projected to have a positive economic outlook for 2025, ranging between 3.5% and 4.5%. Expansion in the tourism industry, post-hurricane reconstruction efforts, and large-scale infrastructure investments across member countries are expected to drive the expansion.
• The ECCB's positive growth projections for the ECCU come amid a global environment marked by economic uncertainty, with risks such as inflation and geopolitical tensions posing challenges to international markets. However, the ECCU’s credit conditions, coupled with efforts in infrastructural projects and financial sector reforms are seen as opportunities for enhanced regional stability.
• The forecast was part of the Governor's Report presented during the 110th meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB) held on February 14, in St Kitts.
• Among key highlights of the meeting was the continued strength of the Eastern Caribbean dollar (EC$), with reserves at EC$5.5Bn as at February 2025. The region's banking sector remains stable, and liquidity remains robust, with strong capital reserves supporting ongoing growth, the ECCB said.
• The ECCU's fiscal situation also showed signs of improvement in 2024, with increased economic activity and stronger fiscal management leading to an increase in funds raised through the Regional Government Securities Market.
• Looking forward, the ECCB stated next steps include addressing critical challenges such as high intra-regional air connectivity costs, which hinder trade and regional competitiveness.

(Source: Caribbean Loop News)

^[1]The Eastern Caribbean Central Bank (ECCB) is the central monetary authority established in 1983 to oversee the Eastern Caribbean Currency Union (ECCU), which comprises eight member countries sharing the Eastern Caribbean dollar (EC$) as their common currency.

• Brazil's central bank monetary policy director Nilton David said on Monday that the base scenario for policymakers is to proceed with an upcoming 100 basis-point interest rate hike, as the bank had previously indicated.
• In his first public speech as director, David stated that the level of confidence in the monetary tightening "must be slightly higher" amid beyond-normal uncertainties marked by tail risks seen in the international geopolitical scenario.
• Speaking at an American Chamber of Commerce event, the director said the central bank aims to minimize risks to meet its 3.0% inflation target. Consumer prices in Latin America's largest economy rose 4.56% in the 12 months to January, with policymakers projecting an acceleration to 5.2% this year, David noted.
• In December, policymakers accelerated monetary tightening with a 100 basis-point rate hike and signaled two more increases of the same size in response to robust activity and a sharp depreciation of the country's currency.
• The central bank followed the guidance in January, pushing interest rates to 13.25% and penciling in another 100 basis-point increase for March, but leaving further steps open.
• Since then, economic data has supported a slowdown in activity, while the Brazilian real has strengthened some 8% against the U.S. dollar year-to-date, easing rate hike bets reflected in the yield curve, which in January had pointed to rates surpassing 16% later in 2025.
• A central bank weekly survey with economists now projects rates peaking at 15.25% in June before edging down to 15% by year-end.

(Source: Reuters)

• The Trump administration's pledge to contain long-term U.S. Treasury yields has strengthened bond market expectations that a long-desired regulatory shift on bank leverage requirements could be finally looming. Some traders are betting regulators may soon focus on a review of the Supplementary Leverage Ratio (SLR), a rule requiring big U.S. banks to hold an extra layer of loss-absorbing capital against U.S. government debt and central bank deposits.
• The possible policy change would mean banks would not need to set aside as much extra money when they hold safe assets like Treasuries. This could eventually help push U.S. Treasury yields lower, some investors and analysts said, by giving banks more leeway to hold Treasuries and likely boosting demand.
• Spreads of swap rates over Treasury yields have widened in recent days, a sign that investors are starting to anticipate a review of the rule. Interest rate swaps allow traders to hedge interest rate risk by exchanging a floating rate for a fixed rate, or vice versa.
• The anticipation comes after U.S. Treasury Secretary Scott Bessent said last week that President Donald Trump's administration was focused on containing 10-year Treasury yields, a building block of global financial markets and a benchmark for consumers' borrowing costs.
• The SLR was introduced as part of regulatory efforts following the 2008 global financial crisis. Over time, however, many Treasury market participants have come to see it as a major obstacle to banks providing liquidity to traders, particularly at times of heightened volatility. The Bank Policy Institute (BPI), a trade association representing large U.S. banks, said in a recent paper that a recalibration of the ratio would be crucial to preserving market functioning, particularly given the prospect of rising government debt issuance due to large budget deficits.

Source: (Reuters)

• China's central bank governor said on Sunday a stable yuan currency has been key to global financial and economic stability and Beijing will continue to let the market play a decisive role in deciding the exchange rate.
• People's Bank of China Governor Pan Gongsheng told a conference in Saudi Arabia that while most currencies have fallen against the dollar, the yuan has remained stable. "Recently, a number of factors have pushed up (the) dollar index, and non-dollar currencies have mostly depreciated. But RMB (yuan) has remained largely stable despite the high market volatility," Pan highlighted at AlUla Conference for Emerging Market Economies.
• He also noted that China was increasingly prioritising consumption, implementing pro-consumption policies such as increasing household income and providing subsidies. China has emphasised that boosting consumption is a top economic priority in 2025, moving away from an over-reliance on investment to stimulate domestic demand and address potential export challenges.
• Pan also said in his speech that China will adopt a proactive fiscal policy and an accommodative monetary policy, and strengthen counter-cyclical policy adjustments.

(Source: Reuters)