• The rebound in U.S. consumer spending moderated in July amid a surge in virus cases, with outlays at risk of further softening after cuts in supplemental relief payments for jobless Americans.
• Household outlays rose 1.9% from the prior month following an upwardly revised 6.2% rise in the prior month, a Commerce Department report showed Friday. That compared with economists’ estimates for a 1.6% gain. Personal incomes rose 0.4%, topping expectations for a slight decline.
• The deceleration in spending -- which accounts for about two-thirds of the economy -- marks a tempering in the economic recovery following two months of stronger gains.
• While spending has increased in recent months, total outlays remain below pre-pandemic levels. Spending could take a further hit in August after the expiration of the extra $600 in weekly jobless benefits at the end of July, which had propped up incomes and consumption.

(Source: Bloomberg)

• With the number of COVID-19 cases rising in the country and five persons dying from the disease in the last four days, President Irfaan Ali announced several measures his Government is taking to tackle the pandemic which includes the sourcing of some US$60Mn to assist in its efforts.
• The funds will be sourced from the World Bank, the Inter-American Development Bank, and the Islamic Development Bank. Another US$2Mn has also been sourced from the Government of India.
• The President also announced that the Bank of Guyana has extended to December 2020, the moratorium to allow commercial banks to further defer customer payments. There will also be a reduction in the liquidity requirement and the lowering of the reserve requirement from 12% to 10%.
• The Head of State noted that the impact of the total shutdown on the country’s economy continues to be severe, with a 4% decline in the economy, and almost 70%contraction of business, and a reduction of operational output as a result of rotation in work so far.

(Source: Stabroek News)

• Fitch Solutions has revised its forecast for Panama’s current account deficit to 9.0% of GDP in 2020 and 6.1% in 2021, up from 5.9% and 5.5% respectively, as a sharp reduction in tourism weighs on Panama’s service trade balance.
• Panama’s goods trade deficit will contract modestly in 2020 amid lower consumer incomes and trade volumes, though it is expected that the deficit will expand in 2021 as economic activity normalizes.
• Robust investor demand for Panamanian assets and a business-friendly economic environment will support Panama’s external account stability despite the wider current account shortfalls.

(Source: Fitch Solutions)

• Several Federal Reserve policymakers say the U.S. central bank may need to ease monetary policy further to help nurse the economy through the coronavirus pandemic, minutes from their policy meeting last month showed on Wednesday.
• The Fed has already slashed interest rates to zero and bought trillions of dollars of bonds in response to the economic crisis spurred by the coronavirus, moves that have provided a boost to jobs and spending.
• However, according to the readout of the July 28-29 policy meeting, members of the rate-setting Federal Open Market Committee saw the rebound in employment already slowing and additional “substantial improvement” hinging on a “broad and sustained” reopening of business activity.

 (Source: Reuters)

• Global trade is starting to crawl back after collapsing to a record low in June, the World Trade Organization said, but the outlook remains too murky to conclude whether a sharp rebound will be happening or the recovery will muddle along for months.
• The Geneva-based organization’s latest Goods Trade Barometer fell to 84.5 in June, compared with a level of 87.6 in May and 95.5 in February. Readings of 100 indicate growth over the next quarter in line with medium-term trends, while those higher or lower than 100 points to growth above or below the recent trend.
• The WTO previously projected that trade flows could fall by as much as 30% and potentially exceed the losses seen during the Great Depression. The latest report said that scenario now seems less likely as trade flows remain on-trend for an 18.5% decline in the second quarter of 2020.

 (Source: Bloomberg)

• General Accident Insurance Company Jamaica Limited reported a 4.0% (or $5.47Mn) decline in net profit attributable to shareholders to $129.91Mn (EPS: 11¢) in for the six months ended June 30, 2020.  
• Despite a 37.1% ($366.37Mn) increase in net premiums earned, the unfavorable outturn was largely due to a material rise in expenses, including a 40.2% (or $254.47Mn) increase in claims expense and a 36.1% (or $151.41Mn) rise in management expenses.
• Management noted that GENAC has been impacted by COVID-19 and that the full impact of the virus on the business remains uncertain.
• The stock has fallen by 8.7% since the start of the year, closing Tuesday’s trading session at $6.48. At this price, the stock currently trades at a P/E of 12.5x earnings, which is below the Junior Market Financial Sector Average of 36.6x.

(Source: GENAC Financials)

• Inflationary pressures in Venezuela will increase over the coming months, driven by recurring gasoline shortages and wider public deficits.
• As a result, Fitch Solutions expects that the Bolívar Soberano (VES) will continue to depreciate in 2020 while inflation remains near the hyperinflationary territory. It forecasts the bolívar will average VES340,065.9/USD in 2020, while inflation will average 2,473.2% y-o-y.
• It also maintains its view that the current Venezuelan government, led by President Nicolás Maduro, lacks the tools to address the core drivers of inflation and currency depreciation, suggesting the situation is unlikely to change moving forward.

(Source: Fitch Solutions)

• Colombian real GDP fell 15.7% y-o-y in Q2 2020, after a 1.1% expansion in Q1 2020, as the Covid-19 pandemic and the resulting government restrictions on mobility and economic activity caused the largest quarterly contraction on record and the first y-o-y decline in over 20 years.
• Private consumption (15.9%), fixed capital investment (32.2%), exports (27.4%) and imports (28.8%) all registered double-digit declines, while government consumption increased 3.0% y-o-y.
• It is forecasted that real GDP will contract 5.0% y-o-y in 2020, with risks heavily weighted to the downside. The 2021 outlook, however, is more upbeat, with forecast 3.6% growth.

 (Source: Fitch Solutions)

• The Trump administration is considering additional sanctions on Venezuela aimed at halting the remaining fuel transactions permitted with the South American nation, according to people familiar with the matter.
• The measures could target crude swaps with companies in Asia and Europe.
• S. officials have debated the move for months, yet they initially prioritized actions against Iran, which began exporting gasoline to fuel-starved Venezuela. The sanctions have not been decided and talks are ongoing.

(Source: Bloomberg)

• President Donald Trump said he called off last weekend’s trade talks with China, raising questions about the future of a trade deal that is now the most stable point in an increasingly tense relationship.
• The phase-one trade deal, which came into force in February, had called for discussions on the implementation of the agreement every six months.
• Chinese Vice Premier Liu He was supposed to hold a video conference call with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, but it was postponed indefinitely.
• While China is making many of the structural changes it promised on issues such as intellectual property protection, its purchases of U.S. goods are well below where they need to be to meet promised targets, and there is almost no chance they can be fulfilled now with the damage COVID-19 has done to the global economy.
• A collapse of the deal increases the risks of a return of the tit-for-tat tariff war that hurt trade and companies around the world.

(Source: Bloomberg)