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28th August 2010
Daily Market Watch
Wednesday, August 25th, 2010

Global Markets

• Sales of U.S. new homes unexpectedly dropped in July to the lowest level on record, signaling that even with cheaper prices and reduced borrowing costs the housing market is retreating.

• Orders for durable goods increased less than forecast in July, a sign one of the few remaining bright spots in the U.S. economy is cooling.

• CIBC’s quarterly profit topped analysts’ estimates on declining loan losses.

• German 10-year bond yields reached the lowest on record as concern resurfaced that some European countries will struggle to contain deficits. Irish bond yields jumped to the highest since May after Standard & Poor’s cut the country’s credit rating one step to AA- on concern the rising cost of supporting its struggling banks will swell the budget deficit.

• Japan’s export growth slowed for a fifth month in July, adding to risks in an economy under threat from the yen’s surge to a 15-year high against the dollar.


Figure 1: U.S. Daily Economic Indicators

Source Bloomberg
 
 
Caribbean Markets

Caribbean
• In press reports, a senior government official stated recently that Germany intends to strengthen its ties and influence in Latin America and the Caribbean.

• Standard and Poor’s (S&P), has affirmed its AAA rating for the Caribbean Development Bank (CDB). S&P noted CDB’s strong capitalisation, its diversified and well-performing loan portfolio, its prominent position as a lender in its borrowing member countries, and the recent demonstration of strong shareholder support in the form of a large paid-in capital increase, and adequate liquidity.

Jamaica
• The Bank of Jamaica has intervened in the foreign exchange market in an effort to moderate revaluation of the Jamaican dollar, which has been strengthening against its US counterpart.

• Registrar of Cooperative Societies Errol Gallimore said local credit unions are now largely compliant with international financial-reporting requirements.

• The National Export Import (EXIM) Bank is offering increased support to the Jamaican non-traditional export sector in the form of developmental loans beginning at the rate of 12% for Jamaican dollar loans, and 8% for USD loans. The Bank is targeting existing and potential exporters as well as those who provide products and services to exporters.

Trinidad
• Press reports that local organizations have urged the government to reduce the country’s dependency on the energy sector and strive for diversification in the 2010/2011 budget, which will be presented in September.

Figure 2: Tracking key Caribbean financial indicators

DISCLAIMER- This document is for informational purposes only. This information is based on the close of the previous business day activity. The information presented is from usually reliable sources. FirstCaribbean has not independently verified the facts, assumptions, and estimates contained in this report. No representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, or completeness of the information and opinions contained in this report. FirstCaribbean International Bank accepts no liability for any loss occasioned by reliance on any information contained herein which may prove to be incorrect. For current market bids and offers, please contact: David Whitcroft, Treasury Sales & Trading, FirstCaribbean International Bank, Phone 246-367-2272 (Barbados), and Fax: 246-421-9207 (Barbados); david.whitcroft@FirstCaribbeanBank.com

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