• Central banks in developing economies ramping up interest rates will be supportive for emerging market debt and provide a buffer against policy tightening by the U.S. Federal Reserve, but could spell trouble for equities, BlackRock said on Monday. 
• "Central banks across the emerging world have been raising interest rates to try to contain inflation and prevent their currencies from depreciating sharply," said Wei Li, global chief investment strategist at the BlackRock Investment Institute at the world's largest asset manager. 
• A weighted average of policy rates across emerging markets that are part of JPMorgan's global diversified index now stands at 3.2% and is expected to rise to just under 5% in a year. This compares to near zero or negative rates in the United States and the Euro area. 
• "This makes us cautious on EM equities, but has made selected EM debt more attractive in a world starved for yield”. Said Wei Li.

(Source: Reuters)

• The S&P 500 eased from record intraday highs Monday but remained supported as investors cheered news that Federal Reserve Chairman Jerome Powell was nominated for another term. 
• The S&P 500 rose 0.51%, and had earlier hit a record of 4,743.74, the Dow Jones Industrial Average added 0.77% or 272 points, the Nasdaq fell 0.3%. 
• President Joe Biden nominated Jerome Powell for a second four-year term as U.S. Federal Reserve Chair and nominated Governor Lael Brainard to vice-chair. 
• Both Mr Powell and Ms Brainard have similar dovish views on monetary policy but many believe that Ms Brainard would promote tighter regulation of financial institutions. For that reason, the Powell nomination has been viewed favourably by financial markets. 
• Treasury yields jumped on the news, suggesting that some had been betting on Brainard, who leans more dovish, which would likely have led to a lower for longer approach on monetary policy.

(Source: Investing.com)

• Jamaica is now leading the world in terms of demand by persons searching for destinations; international air passengers; Global Distribution System (GDS) bookings as well as air seat capacity recovery. 
• Director of Tourism, Donovan White informed that the demand for Jamaica as of now is 38.0% of 2019, against the world demand of 24.0%. 
• In terms of air seat capacity flown, committed or scheduled to be flown to the destination, Jamaica is at 65.0% of 2019 air capacity against the world capacity of 44.0% of 2019. 
• He added that for international air passengers, Jamaica is at 45.0% of 2019 levels against the world delivery of passengers of 31.0% and by way of GDS – the platform travel agents use to book travel – Jamaica is at 61.0% of 2019 levels versus 28.0% for the world. 
• The information about Jamaica’s world-leading status was shared recently in a sit-down with Amadeus at the World Travel Market in London. Mr. White noted that Amadeus is the most interconnected IT company in the travel industry globally, handling some 8.5Bn travel transactions daily. 
• This demand for Jamaica’s tourism product has been reflected in the gradual recovery in tourism activity since the start of the year. These numbers could improve if the country is able to increase its vaccination rate to stem the spread of the virus and support further improvement in country’s ranking on the US Centre for Disease Control and Prevention’s travel advisory. A higher vaccination rate would facilitate further easing of restrictions on movement and re-opening of the entertainment sector. Jamaica is currently ranked at level three, which urges US travelers to be fully vaccinated before travelling.

(Source: JIS & NCBCM Research)

• Tropical Battery Company Limited will begin collecting spent lithium batteries for recycling in early 2022. 
• The St. Andrew-based company is securing the requisite certifications and will export the spent lithium batteries from consumer electronics and electric vehicles to be recycled by a leading international recycling partner that recovers 95% of the elements for sale back to global battery manufacturers. 
• Tropical Battery is responding to the need for an environmentally friendly end-of-life solution for lithium batteries, building on its legacy as the leading exporter of spent automotive batteries for recycling. The growing popularity of lithium-based energy storage solutions in renewable energy systems, and the emergence of an electric mobility ecosystem in Jamaica demand action to align Jamaica with the cyclical economy of tomorrow. 
• Tropical Battery will collect spent lithium batteries in specialized receptacles at all its six locations across Jamaica. The company is encouraging members of the public to play their part by bringing in spent lithium batteries for recycling and is offering a 5% discount on in-store-store purchases to customers who do. 
• While this will allow the company to continue its longstanding commitment to environmental stewardship and the preservation of Jamaica’s natural heritage, it will also help to increase non-core revenues which could have an impact on Tropical’s bottom-line.

(Source: JSE & NCBCM Research)

• The Inter-American Development Bank (IDB) will help the Dominican Republic to strengthen and consolidate its integrity mechanisms in the public procurement system, strengthen internal control, promote open government and public ethics, and support the implementation of public procurement policies, and transparency of public spending. 
• This assistance is well needed as the country has and continues to struggle with political risks, especially corruption. While Abinader and its allies hold majority in both houses of Congress, additional allegations tied to Adinader and top government officials may weaken his ability to pass reforms to combat corruption as was promised in his campaign. In Transparency International’s 2020 Corruption Perception Index, the Dominican Republic received a score of 28, tied for 137^th among 180 markets ranked. For reference, Jamaica and Trinidad & Tobago rank 69^th and 86^th
• During the Regional Policy Dialogue on Transparency and Integrity, in which President Luis Abinader participated, the general manager of IDB Invest, James Scriven, said that support shows a commitment to transparency and integrity in Latin America and the Caribbean, as this is a key element to promote sustainable and inclusive economic recovery in the post-pandemic within the Vision 2025 strategy. 
• According to Scriven, by supporting countries in advancing their transparency and integrity agendas, the IDB promotes better use of public resources and is giving a strong signal that the rule of law and its institutions are being strengthened in the region. These are important pillars for the attraction of private investments that will be vital pillars to sustain the continuous development of our region.

(Source: Dominican Today & NCBCM Research)

• Resilient private consumption and investment will drive Colombia's recovery from the COVID-19 pandemic over the coming quarters, particularly as the labour market strengthens and household incomes rise.  
• Fitch Solutions has revised its 2021 real GDP growth forecast to 8.5%, from 6.7% previously, as macroeconomic data continues to surprise to the upside. In Q321, the economy grew 13.2% y-o-y and 8.4% q-o-q. Fitch maintained its 2022 growth forecast of 3.9%. 
• However, rising headwinds to investment and exports will cause growth to slow in the medium-to-long term, and growth is expected to average 3.2% from 2023-2025.

(Source: Fitch Solutions)

• Canada's annual inflation rate accelerated again in October, matching a February 2003 high, led by sharp rises in gasoline and housing prices, data showed on Wednesday. Analysts expect more heat ahead.  
• Inflation rose to 4.7%, in line with expectations, up from 4.4% in September, Statistics Canada data showed. It was the seventh consecutive month in which headline inflation topped the Bank of Canada's 1-3% control range. 
• Prices rose in all eight major component groups for the second month in a row and analysts said that trend was likely to continue. 
• "There is more heat ahead, particularly with the Vancouver port disruptions. And I think we are going to get inflation crossing well above 5% by the end of the year," said Derek Holt, vice president of capital market economics at Scotiabank.

(Source: Reuters)

• The prospects of speedier interest rate hikes from the Federal Reserve and ongoing supply chain disruptions weighed on Wall Street Wednesday, while oil dropped on concerns of oversupply and dwindling demand.
• U.S. stocks spent most of the trading day in negative territory, after a Tuesday boost driven by better than expected U.S. retail numbers. Rising inflation and potent consumer demand suggested to investors the Fed could hike rates quicker, while supply chain concerns drove down retailers like Target and Walmart. 
• "The good news for investors is that aggregate demand appears to be weathering the surge in inflation so far," wrote Bank of America analysts in a note. "The bad news is that the combination of robust demand and a large supply shock makes a strong case for Fed tightening."

(Source: Reuters)

• Bank of Jamaica (BOJ) increased its the policy interest rate, the rate offered to deposit-taking institutions on overnight placements with BOJ, by 50 basis points to 2.00% per annum, effective 17 November 2021. 
• The decision by the Monetary Policy Committee (MPC) was unanimous and was based on its assessment that this action was necessary to limit the second-round effects of recent shocks, such as supply chain disruptions and adverse weather events. The rate increase is meant to guide inflation back within the target range over the next two years, following the breach of the upper limit of the 4.0% to 6.0% target range for 3 consecutive months. Consumer prices increased by 8.5% in the 12 months to October 2021, the highest since September 2014. 
• The reduction in the level of monetary accommodation will cause market-based interest rates to rise further, which will make the returns on Jamaican dollar assets more attractive relative to foreign currency assets. It will also make saving in Jamaican dollars more attractive and borrowing in Jamaican dollars more expensive. These effects are intended to temper the demand for foreign currency and hence moderate the pace of depreciation in the exchange rate. It is also intended to generally, reduce demand in the economy and with it the ability of businesses to pass on price increases to consumers. 
• Inflation is projected to average 5.5% to 6.5% over the next two years. Inflation will continue to breach the upper limit of the Bank’s target range over the next 10 to 12 months at higher rates than were envisaged in the previous forecast and is projected to peak in the range 8.0% to 9.0% over this period. The inflation forecast assumes, inter-alia, the continued transmission of higher international commodity and shipping prices to domestic processed food, food-related services and energy price inflation as well as a recovery in domestic demand.
• While the higher policy rate will help to stem inflationary pressures, it could undermine the nascent economic recovery through a reduction in investments and private consumption. 
• There could be further monetary tightening in the short term as consistent with meeting its inflation target sustainably in the medium term, the MPC agreed to consider further increases in the Bank’s policy rate (and by extension raising real interest rates, which are currently significantly negative) and to maintain or intensify the accompanying measures at subsequent policy meetings. This position is subject to changes in inflation expectations, other macroeconomic data and, consequently, the inflation outlook evolving as projected.

(Sources: BOJ & NCBCM Research)

• The tourism sector, one of the most severely impacted industries during the pandemic, will be a significant driver of economic recovery in 2022. 
• Fitch Solutions expects that most Western consumers’ willingness to travel will increase in 2022, but that demand will be focused on short-haul destinations in the Caribbean and Southern Europe. This will bolster the recovery across tourism dependent countries such as Jamaica, Barbados and Bahamas in 2022. 
• However, tight travel restrictions in China will depress visits to Asian destinations. The agency also expects that EMs like Thailand and the Philippines will experience a very slow, multi-year recovery. 

(Source: Fitch Solutions & NCBCM Research)