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09th Feburary 2010
FirstCaribbean Daily Markets Report
Monday, February 08th, 2010

Global Markets

• Treasury Secretary Timothy F. Geithner said the U.S. is in no danger of losing its AAA debt rating even though the Obama administration has predicted a $1.6 trillion budget deficit in 2010. Moody’s Investors Service Inc. last week said the U.S. government’s bond rating will come under pressure in the future unless additional measures are taken to reduce budget deficits projected for the next decade.

• Former Federal Reserve Chairman Alan Greenspan said a U.S. economic recovery is “going to be a slow, trudging thing,” and that he “would get very concerned” if stock prices continue to fall.

• Corporate borrowing costs are rising at the fastest pace in more than two months on concern that worsening government finances will slow the global economy and make it harder for companies to meet debt payments.

• Zurich-based UBS may report its first annual profit since 2006 this year after spinning off $38.7 billion in toxic assets into a central bank fund, cutting 18,500 jobs and appointing 11 new managers to the executive board, including a chief executive officer. The bank reports fourth-quarter 2009 earnings tomorrow.

• Brazil’s biggest banks are moving up forecasts for interest-rate increases to as soon as next month as concern mounts that an economic recovery will fuel inflation.

• A slump in commodities last week was caused by a strengthening dollar and raw materials remain “hot ticket” investments for 2010, Morgan Stanley said. Copper, sugar and lead prices more than doubled last year, helping raw materials post the biggest annual gain in four decades on Chinese demand.

Figure 1: U.S. Daily Economic Indicators


 
 
Caribbean Markets

Barbados: Barbados expects to sign a new double taxation protocol with China next week.

Bahamas: The Nassau Guardian reported that the Celebration Cruise Line was pulling out of Nassau from March 15, ending a partnership which had brought tens of thousands of extra tourists into the Downtown economy. Nassau's loss may prove to be Grand Bahama's gain as bosses at Celebration Cruise Line forecast that they'll soon be bringing up to 4,000 passengers a week to the island.

Jamaica: Jamalco ended 2009 with its best ever annual production of alumina, with 1.4 million metric tonnes - some 100,000 metric tonnes above the previous 2006 record of 1.3 million metric tonnes.

Air Jamaica, the highly indebted airline currently in negotiations with Caribbean Airlines, has announced the further reduction of its aircraft to six and plans to shed more routes. A deal with Caribbean Airlines is expect by the end of March.

St. Kitts & Nevis: The BBC reports that Prime Minister of St Kitts and Nevis, Denzil Douglas, has included a member of the governing party in Nevis in his new cabinet.

Dr Douglas named Patrice Nisbett, an MP of the Nevis Reformation Party, as the Attorney General in the new nine-member Cabinet, which was sworn in on Sunday. The move in effect shores up the position of the governing Labour Party, which won six of the 11 seats in the federal parliament, even though the party took all but two of the eight on St Kitts.

Trinidad: Tobago suffered significant declines in tourist arrivals from their major UK market and from Germany in 2009. Some hotels reported as much as a 40% decline in stay-over.

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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