• Moody's Investors Service ("Moody's") yesterday affirmed the Cayman Islands' Aa3 government bond and issuer ratings. At the same time, the rating outlook was maintained at stable.
• The action reflects Cayman Island’s continued fiscal surpluses that have resulted in low and falling government debt metrics. The rating action also considers Cayman’s very high per-capita income which is balanced by the risks posed by its small, narrow economy that is susceptible to weather-related shocks. 
• Additionally Moody’s also took into account Cayman’s strong institutional framework, reflecting a broad consensus on macroeconomic policies, supported by fiscal oversight from the UK.

(Source: Moody’s Investor Service

• The spread between 3-month and 10-year Treasury notes has fallen below 10 basis points for the first time since 2007.
• An inverted yield curve, where short-term yields are higher than their longer-term counterparts, is considered a reliable recession signal.
• The Federal Reserve this week said the U.S. economy is still strong but is facing challenges from global weakness.

(Source: CNBC)

• U.S. President Donald Trump noted that trade negotiations with China were progressing and a final agreement "will probably happen," adding that his call for tariffs to remain on Chinese imported good for some time did not mean talks were in trouble.
• He expected to keep a 25% tariff on European light trucks amid separate on-going trade talks with the European Union, but that company could avoid it by building factories in the United States.
• The Trump administration is engaged in on-going trade talks with both the European Union and China as part of the President's "America First" agenda. Top U.S. officials are headed to Beijing in coming days amid a possible Trump summit with Chinese President Xi Jinping to seal any final deal.

(Source: Investing.com)

• Over the next five years, a total of US$25 million will be invested in a project designed to finance and aid innovation, entrepreneurship, and growth of micro, small, and medium-sized enterprises (MSMEs) and business startups.
• Making the announcement during his contribution to the Budget Debate on March 19, Prime Minister Holness, said the initiative will be supported by a US$500,000 grant from the Inter-American Development Bank (IDB).
• The objectives are to promote innovation and productivity among established MSMEs with high growth potential; promote sustainable and disruptive growth in scalable startups, and create sustainable startups and a strong support ecosystem for entrepreneurship.

 (Source: JIS)

• The National Housing Trust (NHT) will be introducing an intergenerational mortgage programme in the upcoming fiscal year according to Prime Minister, the Most Hon. Andrew Holness,
• This initiative, he said, will allow flexibility in how a family member can support a beneficiary in acquiring an NHT property.
• The aim is for a younger sibling or child to agree to carry the mortgage obligation, subject to affordability when the older mortgagor retires or dies.

(Source: JIS)

• In the budget debate yesterday, the Prime Minister warned that the country can expect six more years of fiscal medicine before the economy can recover fully, less than six months into an International Monetary Fund austerity programme.
• The bread-and-butter tourism industry has been slapped with increases in room rate levies which is expected to generate government revenues of $15Mn. There was also an increase in VAT on accommodation from 7.5% to 10%, which is expected to generate $27Mn in revenues.
• Changes to property tax are also expected to generate revenues of $61.9Mn and there was an introduction of gaming tax; 20% tax on winnings and 17.5% on all gaming establishments.
• On a more positive note, however, Prime Minister Mottley has noted that Barbadians will be able to open foreign currency bank accounts in Barbados from July as the administration begins to loosen nearly five decades of foreign exchange controls.
• Prime Minister Mottley reported that the NIR has risen from just over $400Mn as of early 2018 to $1.1Bn as of March 20, 2019.

 (Source: Barbados Today)

• Fitch Solutions maintains its expectation that the Central Bank of Trinidad & Tobago (CBTT) will likely devalue the Trinidad & Tobago Dollar (TTD) in late 2019 in response to capital outflows and hard currency shortages.
• Accordingly, Fitch expects the TTD to average TTD$7.50/USD in 2019, down from its current spot of TTD6.78/USD.
• There are substantial upside risks to Fitch’s forecast as the CBTT has proven committed to using the managed peg to combat pass-through and wage inflation.

 (Source: Fitch)

• The Fed went beyond the market’s most dovish hopes, signaling it will extend a pause on rates through the year, and increasing the odds its next move will be a cut.
• The initial reaction in stocks was to rally, but that faded before the end of the session as investors digested the implications of the decision: If policymakers are this worried about the outlook for growth, then maybe traders should be too.
• It was a different story in the bond market, as Treasury yields fell, and bond prices across the world rose.

 (Source: Bloomberg)

• The Federal Reserve appears to be taking a more dovish approach to the markets, but Victoria Fernandez suggests it’s not enough to keep the markets stabilized.
• As long as geopolitical risks dominate the headlines, the chief market strategist at Crossmark Global Investments contends they’ll exacerbate global slowdown fears which could undermine 2019′s historic rally.
• “The two biggest concerns on that list are going to be Brexit and the U.S.-China trade relations,” said Fernandez.
• Despite her view that stocks are vulnerable to a pullback, she largely believes the U.S. economy is strong enough to withstand these obstacles — including one more Fed interest rate hike. However, it looks like another move higher is off the table this year, since the Fed announced plans to keep rates unchanged.

 (Source: CNBC)

• Fitch predicts that Jamaica will continue to run budgetary surpluses in the coming years, with a broad political consensus supporting fiscal consolidation measures.
• Expectations are that the 2019/20 Budget, which includes modest increases to social and security spending and tax cuts for small businesses, will pass in the coming weeks. 
• With Jamaica running annual surpluses, Fitch Solutions forecast total government debt to fall to 87.3% of GDP in 2021, from 115.8% in 2017.

(Source: Fitch)