FirstCaribbean Daily Markets Report
Wednesday, February 10th, 2010
• More than a fifth of U.S. homeowners owed more than their properties were worth in the
fourth quarter as the number of houses and condominiums lost to foreclosure climbed to a
record, according to Zillow.com.
• Senate Democrats are pushing for approval this month of a job-creation bill that includes a
payroll-tax holiday for companies that hire unemployed workers.
• German Finance Minister Wolfgang Schaeuble told lawmakers that options for helping
Greece extended beyond loan guarantees, said an official who attended the briefing today
at the parliament in Berlin. The prospect of German aid for Greece drove the nation’s bond
yields down the most since the creation of the euro.
• Alberta, home to the largest oil reserves outside the Middle East, said it will erase its record
budget deficit in three years, becoming the first major Canadian province to return to a
surplus after the global financial crisis.
• UBS AG’s loss in 2009 will trigger the bank’s bonus claw back mechanism for the first time,
depriving senior bankers of 300 million Swiss francs ($282 million) of deferred pay they
were due to receive this year.
• China, the world’s second-largest sugar consumer, may import more of the sweetener to fill
a supply shortage caused by adverse weather, the Beijing-based customs office said in a
Figure 1: U.S. Daily Economic Indicators
Latest Previous 10/30/2009 10/31/2008 10/31/2007
Effective funds rate 0.25 0.25 0.10 0.25 4.78
3 month Treasury bill 0.09 0.10 0.05 0.36 3.96
2 year Treasury yield 0.81 0.79 0.95 1.50 3.95
5 year Treasury yield 2.29 2.27 2.38 2.70 4.05
10 year Treasury yield 3.63 3.60 3.45 3.84 4.38
3 month Libor 0.25 0.25 0.28 3.03 4.89
2 year swaps 1.10 1.11 1.28 2.62 4.58
5 year swaps 2.63 2.61 2.71 3.70 4.72
10 year swaps 3.73 3.70 3.61 4.30 5.03
10yr swap (bps) 9.67 9.78 16.38 46.63 79.00
CAD 1.0639 1.0668 1.0804 1.2300 0.9529
GBP 1.5665 1.5627 1.6538 1.6184 2.0736
EUR 1.3793 1.3764 1.4789 1.2746 1.4456
JPY 89.6900 89.7400 91.0800 97.9100 115.1200
Oil price (WTI CRUDE) 74.02 72.51 79.26 64 91
• An economist from the University of the West Indies (UWI) cautioned that if the Barbados
Government fails to aggressively deal with the present fiscal crisis, it could lead to
additional suffering as a result of job losses and a decline in the nation’s standard of living.
• Professor Michael Howard said he supported the proposed public sector wage freeze as
an option in dealing with its serious current account deficit.
• Omni Money Transfer company reports that remittances to The Bahamas have increased
around 25% in the last year
• Guardian Business reports that the Government may be readying to approve several oil
exploration licenses. The report comes as an oil territory dispute boils up, with the
government staking its claim on territory over potentially oil rich fields lying beneath a
disputed area with Cuba and the U.K. It is also now awaiting a response before plotting its
• Most of Belize’s 8,867 square miles of territory and much of the waters offshore have been
parceled out in petroleum contracts (concessions) to 17 different companies with a range of
foreign shareholders from as close as the USA and as far off as Taiwan.
• Belize Natural Energy (BNE) has one of those 17 contracts, and it remains the only
company producing and exporting oil from Belize, since it struck oil in mid-2005. BNE is
owned primarily by Irish investors.
• Companies have up to 8 years to explore for oil, and 25 years to undertake production and
pump oil commercially out of the ground. If no oil is found within the eight-year exploration
phase, the contract “self-terminates.”
• Local press reports that the Government expects only three per cent devaluation of the
Jamaican dollar during 2010/2011 but is only allowed US$300 million to back the local
currency against the US dollar. The administration agreed to limit its intervention next year
under a quantitative performance criterion set out in the memorandum economic and
financial policies (MEFP) that was submitted to the International Monetary Fund (IMF).
• Prime Minister Bruce Golding is proposing the twinning of the capital with China's city of
Tianjin in a move that could lead to the Asian country providing services to assist in the
restoration and re-development of Kingston.
• Press reports that Trinidad and Tobago's state-owned integrated energy company
Petrotrin has been given a mandate by the government to boost oil production volumes,
marking a renewed bid to reverse at least some of the decline that has set in over the last
• The country's oil production stands at 110,000 barrels per day (BPD), compared to natural
gas, which skyrocketed to 700,000 barrels of oil equivalent a day (boed), positioning the
twin-island as a major exporter of liquefied natural gas.
• Energy Minister Conrad Enill said the government would prefer a mix that is more
balanced. "We believe that Petrotrin has an important role to play in delivering on this
objective and we have challenged its leadership to organise in such a way as to support
this requirement for increases in oil production. Petrotrin, in response, has begun to deliver
on this mandate". Petrotrin signed new 10-year sub-licence agreements with five local
contractors to explore for oil and gas in seven onshore fields.
Figure 2: Tracking key Caribbean financial indicators
Latest Previous 10/30/09 10/31/08 10/31/2007
USD Govt of Jamaica 2015 (vs.5yr) 795 823 781 1241 348
USD Govt of Jamaica 2019 (vs.10yr) 674 706 809 987
USD Govt of Barbados 2021 (vs.10yr) 353 355 380 402 168
USD Govt of Belize 2029 (vs.10yr) 1,215 1,216 1358 1098
USD T&T 2020 (vs.10yr) 214 214 281 483 143
USD Grenada 2025 (vs.10yr) 1,296 1,297 1279 931
JSE Market Index (Jamaica Stock Excha 76,543 75,716 80,532 93,486 99,579
TT Index (Trinidad Stock Exchange) 1,145 1,145 1,117 1,251 1,182
JMD FX Rate 89.72 89.73 89.30 76.24 71.12
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