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Week over week the FX market showed moderate liquidity available with a slight appreciation of the $J (-0.34%) to satisfy the requests for end-users and institutional clients<br> There was no B-FXITT intervention from the Bank of Jamaica (BOJ) for this week. As we near the upcoming Christmas holiday season, the demand for USD should continue to rise to buy more imported goods but is expected to taper off as we get closer to the end of the month. For the week starting December 5, 2022, we expect the JMD demand to weaken in favour of USD in anticipation of seasonal boost in importation of consumer goods.&nbsp; Last week saw a rally in the prices of risk assets including the emerging market bonds as jobs market results came out stronger than expected and the Fed signalling the possibility of smaller rate hikes in 2023. Shorter dated bond prices were flat for the week while longer dated bonds posted week over week growth. JAMAN 2039 and JAMAN 2045 bond prices saw increases of 3.03% and 4.00% respectively, while the 25’s and 36’s on average remained stable week over week. As investors expect sluggish economic conditions in 2023, they are moving out further on the bond curve, a trend which explains the current yield curve inversion of the 10Y to 2Y portion of the US government bond yield curve. The market could continue its recovery this week if Initial Jobless Claims falls below the market expectation of 1.6M claims on December 8th and if preliminary consumer sentiment estimates on December 9th come out above the market expectation of 56.9. We however believe that both these readings could be a negative surprise given that the labour market has been shedding jobs in the last two months and given that consumer sentiment has been somewhat impaired by inflation in the same time frame. &nbsp;in demand for shorter term funds. There was a slight downtick in short term (&lt;30days) overnight rates which trended up to a maximum of 8.4% when compared to the prior week of 8.5%. While the longer tenure rates edged up to a range of 8.95%-9.25%. The BOJ 7.50% Fixed Rate 30-day Certificate of Deposit auction for the allocation of J$20.5B was oversubscribed, with total value received amounting to J$25.9B. The average yield for successful bids was 8.94%, with highest submitted bid rate of 11.25% and lowest of 7.50%. Week over week, USD rates also remained sufficient liquid as the recent market behaviour lags with rates ranging between 3.75% - 4.25% in the short term (&lt;30 days). For the week starting December 5, 2022, the expectation is that both JMD &amp; USD liquidity will remain moderate with the expectation that the USD supply will slightly diminish with the current focus surrounding holiday shopping.

Week over week there was increased trading activity in the FX market, marked by high demand for USD. Volumes traded grew mainly due to end users positioning for the upcoming holiday season. As a result, the JMD rate depreciated by 1.08% against the USD rate. There was no BFXITT intervention from the Bank of Jamaica (BOJ) for the period. For the week starting November 14, 2022, the expectation is that the JMD will continue to depreciate, however this may be slightly offset by increased demand for JMD to facilitate end of month statutory payments. Week over week the bond market yield dipped in response to US CPI data of 7.7% for October compared to the previous month’s 8.2% result. Due to this, investors are speculating that the Fed may be less aggressive in rate hikes than over the past year and have priced in a 50-basis point (bps) hike instead of 75 bps. The equity market rallied as investors were more pro-risk due to increased market optimism. This change in attitude was reflected in lower yields resulting due to an overall increase in bond prices. However, JAMAN bond prices remained relatively flat for the period due to a lagged response to the recently announced US CPI data. For the week commencing November 14, 2022, we expect a stronger risk-on sentiment towards the equity market relative to fixed income securities due to the better-than-expected inflation result. However, U.S. retail sales data which comes out on Wednesday could cause markets to pull-back if they are below expectations. Week-over-week, the JMD market maintained its liquidity relative to the prior week. However, liquidity was concentrated at short-term overnight rates where there was an upward tilt in placements against borrowing which resulted in a decline to 7%-7.5% over the period. Conversely, longer tenure rates (&gt;30days) increased for the period. This was mainly driven by borrowers demanding rates ranging in excess of the 30-day rates into 2023. The BOJ 7% Fixed Rate 30-day Certificate of Deposit auction for the allocation of J$18B was oversubscribed, with total value received amounting to J$19.98B. The average yield for successful bids was 8.80%, with the highest submitted bid rate of 11% and lowest of 7%. USD liquidity increased marginally week over week in response to investors positioning for the upcoming holiday season. For the week starting November 14, 2022, we expect JMD demand to be in line with supply while USD liquidity might increase marginally.

Week over week the FX market had ample liquidity available to satisfy the requests for end-users and institutional clients. There was no B-FXITT intervention from the Bank of Jamaica (BOJ) for this week.<br> However, there was a recent mass selling of USD from a major market player which contributed to the marginal depreciation of JMD against USD by 0.24% to close the week selling at J$155.04.<br> As we near the upcoming Christmas holiday season, the demand for USD should continue to rise to buy more imported goods.<br> For the week starting November 25, 2022, we expect the JMD demand to weaken in favour of USD in anticipation of seasonal increase consumer spending.<br> This week was short for the bond market with low activity mainly attributable to the largest market players being on holiday for the latter part of the week. As such, bond prices remained relatively flat coming off a rally caused by a miss in CPI expectation in the weeks prior. However, the longer dated JAMAN45 bond prices saw increases of 2.51% while the 25’s and 36 on average remained stable with marginal declines week over week. To close the month of November 2022, another short week in which we expect the bond market to continue a stable trend in either direction. The Fed Chair speech on Wednesday November 30th and U.S. unemployment rate data on Friday December 2nd could move the market to the upside if the signals are less pessimistic than the consensus estimate. The JMD market saw a marginal amount of tightening, however remained largely liquid. This was evident in the slight decline in the number of brokers doing placements versus borrowing. Due to this, short term (&lt;30days) overnight rates trended up to a maximum of 8.50% when compared to the prior week of 8.00%. While the longer tenure rates edged up by approximately 25bps between 8.50%-8.75%. The BOJ 7% Fixed Rate 30-day Certificate of Deposit auction for the allocation of J$15B was oversubscribed, with total value received amounting to J$22.5B. The average yield for successful bids was 8.47%, with highest submitted bid rate of 11.98% and lowest of 7.50% Week over week, USD rates remained relatively flat with sufficient liquidity as the recent market behaviour lags. For the week starting November 25, 2022, the expectation is that JMD liquidity will remain moderate and USD supply may be dried up due to increase consumer spending following holiday deals.