• Fitch Solutions believes that Mexican President Andrés Manuel López Obrador (AMLO)’s abrupt reversal of course on his nomination for the next governor of the Banco de México (Banxico) will further undermine investor confidence in policy direction. 
• The decision risks weakening investor perceptions of the central bank's independence and credibility as it faces persistent inflationary pressures. 
• While the potential impact on monetary policy is not yet clear, Fitch believes the decision adds to downside risks to Mexico's near-term growth outlook. It previously highlighted elevated inflation and rising interest rates as threats to consumption and investment over the coming quarters. However, this risk could grow as the deterioration of market confidence could feed into higher inflation through both a weaker exchange rate and higher expectations. 
• At the same time, the central bank could now face a more pronounced policy dilemma, in which raising rates threatens growth, but pursuing more dovish monetary policy risks further weakening markets and feeding inflation.

(Source: Fitch Solutions)

• Exports from Latin America and the Caribbean increased 31.2 per cent in the first semester of 2021, driven by the dynamism of external demand, the lifting of restrictions on mobility, and the progress of vaccination campaigns against the novel coronavirus pandemic, according to the Inter-American Development Bank (IDB). 
• The rebound puts the region's external sales of goods 11 per cent above the corresponding level in 2019, after falling 9.2 per cent in 2020 due to the economic crisis caused by the pandemic. 
• The IDB Trade and Integration Monitor report indicated that concurrently, exports of services registered a 33.8 per cent drop after contracting 38.5 per cent in 2020. It noted that more traditional items, such as travel and transportation, were hit hardest. However intensive knowledge-based services proved more resilient. 
• This year's issue of the report, which analyses trade flows in Latin America and the Caribbean region through the first half of 2021, projects the continuation of an upward trend in the region's exports for the rest of the year, despite some signs of a slowdown. 
• Trade recovery was primarily driven by increases in prices (17.6 per cent) and in quantities to a lesser extent (11.5 per cent), but the volume of external shipments has not yet returned to pre-pandemic levels, the report stated.

(Source: IDB)

• U.S. personal spending rose in October from a month earlier by the most since March, while a closely watched inflation measure posted the largest annual increase in three decades. 
• Purchases of goods and services, unadjusted for changes in prices, increased 1.3% following a 0.6% gain in September, Commerce Department figures showed Wednesday. After adjusting for higher inflation, spending rose a healthy 0.7%. 
• The personal consumption expenditures price gauge, which the Federal Reserve uses for its inflation target, rose 0.6% from a month earlier and 5% from October 2020. The figures come as some Fed officials are advocating for a faster tapering of the central bank’s asset-purchase program than initially planned.

(Source: Bloomberg)

• Floods that wiped out bridges, roads and rail lines in British Columbia will hurt Canada's economic growth and fuel inflation in the fourth quarter, but the Bank of Canada's rate-hike timing is likely to remain unchanged, economists said. 
• Doug Porter, chief economist at BMO Capital Market Economics, halved his fourth quarter growth estimate to 3.0% from a year earlier. That drags down his full-year growth forecast to 4.8%, from a previous forecast of 5.0%, because of the floods and global supply chain disruptions. 
• "For the Bank of Canada, it's not obvious that the weaker growth figures will have much impact as they have hit the supply side and actually threaten to boost inflation even further," he added. 
• Economists are clear the flooding will have a material impact on near-term gross domestic product forecasts, but there is considerable uncertainty about how fast growth could bounce back.

(Source: Reuters)

• Remittance inflows for the first 10 months of 2021 (end of October), totaled approximately US$2.5Bn, relative to US$2.0Bn in 2020. Inflows remained strong despite the impact of the coronavirus (COVID-19) pandemic. Total remittances for 2020 was US$2.91Bn, 20% higher than 2019. 
• According to the Deputy Governor in charge of Banking, Currency Operations, and Financial Markets, Natalie Haynes, increased remittances have been flowing from Jamaica’s main sources, the United States and United Kingdom. Significant funds have also been received from the Cayman Islands as most persons in the Cayman Islands are sending home their funds in anticipation of returning to Jamaica. 
• Meanwhile, BOJ Governor, Richard Byles, acknowledged that the onset of increased inflation could start to erode the ability of Jamaicans in the diaspora remitting funds. The rate of inflation in the United States climbed to 6.2% as of October 2021, above market forecasts of 5.8% and was the highest in over 30 years. Annual inflation in the United Kingdom climbed to 4.2% in October 2021.

(Source: JIS News)

• Jamaica’s gross international reserves, as at November 17, totaled approximately US$4.7Bn. Governor, Richard Byles, said the figure represents the equivalent of 143.8% of the level considered adequate. Net International Reserves (NIR), at the end of October, totaled US$3.9Bn, and is expected to be stable for the month of November. 
• The Central Bank expects gross reserves will remain healthy supported by a current account deficit, ranging between 1.0% and 3.0% of Gross Domestic Product (GDP), which is a sustainable level by traditional measures. Expectations for a recovery in tourist arrivals and spending should also help to bolster reserves. 
• The BOJ’s $8.0Bn net open position (NOP) cap, which was temporarily removed in January 2020, will be restored effective December 6, 2021. Net open position, which is used to analyze foreign exchange risk, measures the difference between total assets and total liabilities in foreign currency. However, the cap will be adjusted from the $8.0Bn limit to an asymmetric one, corresponding to a $4.5Bn ceiling for long NOP positions and $7.0Bn for shorter ones. The Central Bank is committed to continuously reviewing these limits annually and amending them if deemed necessary.

(Source: JIS News)

• A new revenue protection framework is expected to go before Cabinet shortly, designed to counter a projected loss of some $300 million in fossil fuel vehicle taxes as the Government drives towards its goal of near 100% renewable energy usage by 2030. 
• Minister of Energy, Small Business and Entrepreneurship Kerri Symmonds also disclosed that his technical officers are working with the Barbados National Oil Company Limited (BNOCL) to devise strategies for switching mechanisms for the commercial introduction and supply of biofuels, an initiative he said, which provides for future investment and economic growth. 
• “We are equally conscious that the replacement of the nation’s fleet of internal combustion vehicles, will cause the Inland Revenue Department to potentially face a loss of $300 million estimated in terms of fuel-related taxes,” Minister Symmonds told delegates at the official opening of the second Barbados Sustainable Energy Conference and Expo 2021 on Monday. 
• He revealed that the studies on alternative taxation mechanisms, which could be deployed in order to compensate for the potential and possible revenue losses that might result from the “broad-based introduction” of renewable energy vehicles in Barbados, have been completed.

(Source: Barbados Today)

• Ever since Guyana sold its first 1,000,000 (one million) barrels of crude in February 2020 for GY$11.5 billion, the petroleum industry has raked in as much as GY$440 billion; this represents GY$57 billion more than the national 2021 budget. An analysis done by OilNow shows that since 2016, the burgeoning oil-and-gas sector has contributed more than $50 billion in taxes. 
• Added to that, ExxonMobil Guyana has said that throughout 2020, the sector contributed more than GY$180.39 billion, an equivalent of US$901.95 million, to the country’s Gross Domestic Product (GDP). 
• Outside of this, oil giant ExxonMobil had said that its Guyana operations between 2015 to present has seen another GY$100.50 billion being expended on the procurement of goods and services from dozens of local businesses. 
• These economic injections are slated to increase exponentially, in keeping with the projected growth of the industry itself. As a matter of fact, a report compiled by the Inter-American Development Bank (IDB) early this year shows that earnings from Guyana’s oil-and-gas sector could reach US$31 billion (roughly G$6.7 trillion) by 2035.

(Source: Guyana Chronicle)

• British businesses reported the fastest growth in new orders since June this month alongside record cost pressures, according to a closely watched business survey that could pave the way for a Bank of England rate rise in December. 
• The IHS Markit/CIPS flash composite Purchasing Managers' Index (PMI), published on Tuesday, edged down to 57.7 in November from October's final reading of 57.8. But that still indicated strong growth and was a shade higher than economists' average forecast in a Reuters poll. 
• "A combination of sustained buoyant business growth, further job market gains and record inflationary pressures gives a green light for interest rates to rise in December," Chris Williamson, chief business economist at financial data provider IHS Markit, said.

(Source: Investing.com)

• U.S. Treasury yields edged higher on Tuesday amid rising bets for a quicker tightening of Fed’s monetary policy after President Joe Biden tapped Fed-Chair Jerome Powell to lead the central bank for a second term. 
• The yield on 10-year Treasury notes rose one basis point at 1.634%, not far from a 2021 high of around 1.7760% hit in end-March. Yields are up by more than 7 bps since Powell's news in the previous session. 
• The short-end of the curve was the hardest hit. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was flat at 0.63% after hitting its highest level since early March 2020. 
• U.S. inflation-protected bond yields also rose for a second consecutive session with ten-year yields holding near minus 1%.

(Source: Reuters)