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29th July 2010
Daily Markets Wrap Up
Tuesday, July 27th, 2010

Global Markets

• American consumers lost confidence in July, shaken by mounting concern over jobs and wages that threaten to contain the economic recovery.

• U.S. apartment landlords are seeing a surge in rentals as mounting foreclosures reduce homeownership. The vacancy rate in the 64 largest U.S. markets declined to 6.6% last month from 8.2% in December.

• BP appointed U.S. born Robert Dudley as CEO and pledged to accelerate asset sales to as much as $30 billion after the Gulf of Mexico oil spill led to a record loss.

• European banks had their biggest share price gains since May as regulators eased proposed rules on capital and UBS and SocGen posted profit that beat estimates.

• Rabobank Nederland issued 300 million pounds of bonds due 2060 as the world’s largest agricultural lender tapped demand for long dated maturities.


Figure 1: U.S. Daily Economic Indicators

 
 
Caribbean Markets

Caribbean
• The overall gross domestic product (GDP) of Latin America and the Caribbean shrank 1.9 percent last year as a result of the global economic crisis that emerged in the United States in mid-2008 – the worst since the 1929 Great Depression.

Bahamas
• According to preliminary statistics released by the Bahamas Hotel Association the 14 major New Providence hotels recorded a 71.5% occupancy rate for June compared to 65.9% in 2009. This occupancy rate combined with an increase in average daily room rate (ADR) of $15.17 generated a 16.3% room revenue boost.

Trinidad
• J.P. Morgan noted headline CPI rose 3.7%m/m in June, more than May’s 2.0%m/m increase, taking the over-year-ago rate to 13.7%oya in June from 9.6% in May. However, core inflation (excluding food) was flat at 4.3%oya in June, suggesting relatively contained underlying inflationary pressures.

• Following the inflation release, the Central Bank of Trinidad and Tobago (CBTT) left the repo rate unchanged at 5.0% at last Friday’s meeting, citing the steadiness of core inflation and the still nascent economic recovery.

• As J.P. Morgan has previously highlighted, sluggish domestic demand, which should also exert downward pressure on non-food prices, is likely to keep the CBTT from reversing the current loose monetary policy stance for now. However, in J.P. Morgan’s view, the recent acceleration in headline CPI is likely to prompt the CBTT to start hiking interest rates late in 4Q10.

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 b

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