• Brazil's consumer prices extended their downward trend during in the month to mid-September, government statistics agency IBGE said on Tuesday, as fuel costs continued to drop on the back of lower taxes and price cuts by state-run oil firm Petrobras.
• Inflation in the 12 months to mid-September hit 7.96%, well below the 8.14% forecasted by economists, likely backing the central bank's recent decision to pause its aggressive rate hiking cycle.
• In August, Latin America's largest economy posted the lowest mid-month inflation rate in about three decades; however, this month's drop was driven by the transportation sector, in which costs fell 2.35%.
• Notably, the inflation drop in September was not widespread as prices fell in only three of the nine groups of products and services surveyed - communication, food and beverages, and transportation.
• The latest inflation data comes as Brazil's central bank last week chose to keep interest rates unchanged at 13.75%, pausing an aggressive tightening after 12 consecutive increases aimed at curbing high inflation.
• William Jackson, the chief emerging markets economist at Capital Economics, said the inflation figures confirmed that the monetary tightening cycle was over. “However, the fact that inflation remains very strong supports our view that the central bank will wait until the middle of next year before turning to interest rate cuts," he added.

(Source: Reuters)

• “Inflation is too high in Canada, so the Bank of Canada needs to increase interest rates to slow spending and give the economy time to catch up,” Governor Tiff Macklem said on Monday in a video posted by the central bank on Twitter.
• "Inflation is too high," Macklem said, echoing remarks made earlier this month after the central bank hiked its policy rate by 75 basis points to 3.25%. "It is important that we get inflation back down so Canadians can plan their spending and their savings, and they don't get surprised by big changes in their cost of living."
• The Bank of Canada, like many of its global peers, is rapidly increasing interest rates in response to inflation running at levels not seen in decades. But the bank has faced public criticism for increasing borrowing costs at a time when many Canadians are already struggling to afford groceries and other essentials. "It is by raising interest rates that we're going to slow spending in the economy, give the economy time to catch up and take the steam out of inflation," Macklem said in the video. "That's gonna get inflation back down."
• The central bank has lifted rates by 300 basis points in just six months as it looks to wrangle inflation back to the 2% target. Canada's inflation rate edged down to 7.0% in August from 8.1% in June and 7.6% in July.

(Source: Reuters)

• An ally of President Vladimir Putin issued a stark new nuclear warning to Ukraine and the West on Tuesday as Russia began releasing results of referendums it bills as a prelude to it annexing four Ukrainian regions.
• Moscow's latest broadside came as European countries rushed to investigate unexplained, major leaks in two Russian natural gas pipelines under the Baltic Sea, which posed risks of explosions and the sinking of any ships that enter the area.
• The Kremlin, which has blamed technical problems for earlier cuts in Russian gas supplies to Europe, said it could not rule out sabotage, without saying who was to blame.
• Russia's confrontation with the West has driven up global inflation and sharpened energy and food crises in many countries since its Feb. 24 invasion of Ukraine, which was met by tough Western sanctions and Russian retaliatory measures.
• Analysts say they are designed to deter Ukraine and the West by hinting at a readiness to use tactical nuclear weapons to defend newly annexed territory, where Russian forces have faced strong Ukrainian counteroffensives in recent weeks.

(Source: Reuters)

• Global outsourcing company Intelcia officially opened its first Caribbean office in Kingston on Thursday (September 22). Intelcia is a global player in outsourcing offering solutions in four main areas – business processes, information technology (IT), innovative consulting, and multichannel customer experience (CX). The company, based in New Kingston, now employs 600 Jamaicans, with more persons to be engaged as the entity continues to build out its staff complement.
• Intelcia joins more than 70 firms operating in Jamaica’s global services sector, which has continued to thrive despite the disruption caused by the COVID-19 pandemic. Industry, Investment and Commerce Minister, Senator the Hon. Aubyn Hill added that Jamaica’s global services sector has been averaging a 20% employment growth, which is among the highest in the world.
• Additionally, it is one of the fastest-growing economic sectors in the country. The resilience of the sector, the Minister said, is further evidenced by the 8.7% growth rate last year, and 5.7% in the last quarter. With further investments expected in the sector considering Jamaica’s geographic positioning, and its English-speaking, educated and trainable population, the BPO sector is forecast to be one of Jamaica’s high-growth sectors for the foreseeable future that will aid in job creation and contribute to economic growth.

(Sources: JIS and NCBCM Research)

• Fitch forecasts 5.9% real GDP growth in Barbados in 2022, driven by the revival of the international tourism sector.  In 2021, the economy grew 5.0%, a revision from the previous estimate of 1.6% due to additional government data releases for 2021, which showed a faster recovery from the pandemic-induced recession than was expected.
• Growth in 2022 will be driven primarily by a continued recovery in Barbados’ tourism sector. This will underpin real export growth of 9.5% in 2022, and 7.0% in 2023.
• Private consumption will grow 5.5% in 2022 and 3.0% in 2023, from 8.4% in 2021, as a stronger tourism sector will continue to boost employment levels in the hospitality sector and drive household spending. As a result, Fitch expects unemployment will continue to moderate in the months ahead.
• In 2023, it is forecasted that inflation will come down in the second half of the year, but it will still average 6.0% for the year as a whole. With elevated inflation in 2022 and the beginning of 2023, it is expected that private consumption will steadily slow in the quarters ahead.
• Central banks in Barbados’s key tourism source markets are likely to continue raising interest rates aggressively to battle historically high inflation. Should economic conditions in these markets deteriorate more severely than expected, Barbados’s post-COVID economic recovery could stall.
• Additionally, if slower global growth heavily impacts Barbados’s tourism sector, weaker growth would also likely delay the government’s push to bring down its debt in accordance with its IMF agreement, potentially forcing the government to make deeper spending cuts in the long term that limit the economy’s growth potential.

(Source: Fitch Solutions)

• CARICOM is launching a major regional platform to facilitate intra-regional trade in goods and agricultural products.
• This CARICOM Marketplace dubbed CIMSUPRO (CARICOM Market Place and Suspension Procedure) will register suppliers and buyers of Caribbean Community (CARICOM) originating goods.
• CIMSUPRO when populated will create a ‘Marketplace’ that will allow regional buyers to find sellers of regionally produced goods, thereby creating the conditions for direct contact between parties.
• The online platform also has the potential for improving the efficiency of the application process for a suspension of the Common External Tariff (CET).
• The platform will help to build the resilience of regional economies by increasing intra-regional trade and supply of goods, especially food, and reducing the high and unsustainable dependence on imports.

(Source: CARICOM TODAY)

• The Bank of England said on Monday it would not hesitate to change interest rates and was monitoring markets "very closely", after the pound plunged to a record low and British bond prices collapsed in response to the new government's financial plans.
• Finance minister Kwasi Kwarteng sent sterling and government bonds into freefall on Friday with a so-called mini-budget that was designed to grow the economy by funding tax cuts with huge increases in government borrowing.
• Such was the market turmoil on Monday that there was growing speculation in financial markets that the BoE would make an emergency interest rate rise after it hiked rates only last week to 2.25% from 1.75%.
• Instead, with the pound fragile and bond prices still tumbling, Kwarteng issued a statement just before the British stock market closed to say he would set out medium-term debt-cutting plans on Nov. 23, alongside forecasts from the independent Office for Budget Responsibility of the full-scale government borrowing.
• S. Federal Reserve official Raphael Bostic said the market moves could lead to greater economic stress in Europe and the United States, while analysts and investors said the government had done the bare minimum to reassure markets.

(Source: Reuters)

• Oil prices hit nine-month lows on Monday, driven down by an expected decline in fuel demand as rising interest rates raise the likelihood of global recession, with further price pressure coming from a surging U.S. dollar.
• Brent crude futures for November settlement slipped by 82 cents, or 1%, to $85.33 a barrel at 1110 GMT. The contract fell as low as $84.51, the lowest since Jan. 14.
• S. West Texas Intermediate (WTI) crude for November delivery dropped 74 cents, or 0.9%, to $78. WTI dropped as low as $77.21, the lowest since Jan. 6.
• Both contracts slumped by about 5% on Friday. The dollar index that measures the greenback against a basket of major currencies climbed to a 20-year high on Monday. A stronger dollar tends to curtail demand for dollar-denominated oil.

(Source: Reuters)

• ECL reported a net profit of US$652.8k for its first quarter ending August 31, 2022, which represents an increase of 15.5% relative to the prior period. This increase in profitability was mostly attributed to the 35.0% increase in revenues.
• Revenue increased as total passengers accessing the departure lounge of Sangster International Airport during the quarter was 37.4% higher than the similar period last year. This higher trend in total passenger arrivals is expected to continue throughout the company’s financial year. 
• Additionally, construction is underway for a few new food outlets and some will be open in time for the winter season. These include the Bob Marley One Love food outlet, Freshens and Bento Sushi which are expected to contribute positively to the company’s revenues and bottom line.
• ECL’s stock price has increased by 4.7% since the start of the calendar year. The stock closed Thursday’s trading session at $5.35 and currently trades at a P/E of 48.2x which is above the Junior Market Sector Average of 20.2x.

(Source: JSE and NCBCM Research)

• Barbados has issued the world's first government bond with a clause allowing payments to be suspended in the event of another global pandemic, a move expected to attract interest from dozens of other countries ravaged by the COVID-19 crisis.
• The country’s new bond - finalised in a deal with bankers on Wednesday - is likely to leave an even bigger imprint, especially with smaller, tourism-dependent countries that were pushed to the brink of economic collapse during the COVID-19 pandemic.
• The bond, to be repaid over the next 15 years, will be the first to allow a government to suspend its payments if another outbreak similar to COVID-19 happens. Payments can be suspended for up to two years at a time and twice if necessary, but it cannot be cancelled altogether.
• Most notably, credit guarantees provided by the Inter-American Development Bank and an organisation called The Nature Conservancy (TNC) means Barbados can borrow more cheaply, saving itself between $40-$50 million compared to its replaced old bond.
• That money will be used specifically for protecting and rehabilitating the surrounding Caribbean Sea, according to the terms of the deal, making it what is known as a 'blue bond'.

(Source: Reuters)