Unit­ed States: Eco­nom­ic da­ta re­leased for the fourth quar­ter re­vealed the Unit­ed States econ­o­my was con­tin­u­ing on its slow growth path though the da­ta came in short of ex­pec­ta­tions. Gross do­mes­tic prod­uct (GDP) grew at a rate of 2.8 per cent be­low the fore­cast of 3.0 per cent. Per­son­al con­sump­tion grew at a rate of 2.0 per cent, low­er than econ­o­mists' es­ti­mate of 2.4 per cent. This was in­deed an im­prove­ment from the 1.8 per cent GDP growth and 1.7 per cent growth in per­son­al con­sump­tion in the third quar­ter, how­ev­er, de­spite steady im­prove­ment in da­ta ear­ly in the quar­ter, No­vem­ber and De­cem­ber re­flect­ed a slow­down in re­tail sales, which con­tributed the slow­er growth. Fur­ther analy­sis re­vealed Amer­i­cans dipped in­to their sav­ings to fi­nance their pur­chas­es. The sav­ings rate fell to 3.7 per cent, the low­est since the last three months of 2007, from 3.9 per cent in the third quar­ter.

As high­light­ed ear­li­er, spend­ing at re­tail­ers slowed from a 0.7 per cent gain in Oc­to­ber to a 0.1 per cent in­crease in De­cem­ber even as ma­jor re­tail­ers cut prices to at­tract more busi­ness dur­ing the hol­i­day shop­ping sea­son. In­fla­tion slowed for yet an­oth­er quar­ter at a rate of 1.1 per cent ac­cord­ing to the Per­son­al Con­sump­tion Ex­pen­di­ture (PCE) core in­dex. This com­pares to 2.1 per cent in the third quar­ter. The slow­ing in­fla­tion is aligned with the Feds' con­sen­sus of con­tained in­fla­tion and lends sup­port to the pos­si­bil­i­ty of fur­ther quan­ti­ta­tive eas­ing should the need arise.

Con­fi­dence lev­els rose for an­oth­er month as mea­sured by the Uni­ver­si­ty of Michi­gan con­fi­dence in­dex. The in­dex mea­sured 75 in Jan­u­ary, up from 69.9 at the end of De­cem­ber and rep­re­sent­ed the high­est lev­el in al­most a year.

A stronger labour mar­ket, cou­pled with high­er stock prices, have been boost­ing con­fi­dence lev­els.

Fed ex­tends low rates fore­cast to 2014

• Fed­er­al Re­serve of­fi­cials said their bench­mark rate will re­main be­tween 0 per cent - 0.25 per cent un­til at least late 2014

• "The com­mit­tee ex­pects to main­tain a high­ly ac­com­moda­tive stance for mon­e­tary pol­i­cy."

Fore­casts

• 2012 growth es­ti­mat­ed at be­tween 2.2 per cent and 2.7 per cent

• 2013 growth es­ti­mat­ed at be­tween 2.8 per cent and 3.2 per cent

• 2012 in­fla­tion pro­ject­ed to fall be­low tar­get lev­el of 2 per cent

• Longer-run fore­cast for the job­less rate is 5.2 per cent -6.0 per cent

Eu­rope

Greece: Ne­go­ti­a­tions be­tween Greece and its bond­hold­ers ap­pear to be com­ing to a close. Re­ports in­di­cate that bond­hold­ers have in­di­cat­ed that they would ac­cept Eu­ro­pean gov­ern­ment de­mands for a big­ger cut in their debt hold­ings. It has been re­port­ed that bond­hold­ers are will­ing to ac­cept a coupon of 3.6 per cent on the new 30-year bond.

Eu­ro­pean yields: Ital­ian yields have fall­en at the lat­est bond auc­tion on Mon­day. Yields on ten-year bench­mark se­cu­ri­ties fell as low as 6.08 per cent. This fol­lows sig­nif­i­cant­ly high­er yields of 6.98 per cent at the pre­vi­ous De­cem­ber auc­tion. Bel­gium, Spain, Por­tu­gal, Ger­many and France are al­so ex­pect­ed to is­sue debt dur­ing the week.

Re­gion­al

Ja­maica: Ja­maica and the In­ter­na­tion­al Mon­e­tary Fund (IMF) an­nounced on Jan­u­ary 24 that they have agreed to rene­go­ti­ate their fi­nanc­ing agree­ment. Ja­maica has failed to ex­e­cute the nec­es­sary re­views un­der their stand-by agree­ment (SBA) with the IMF which has re­sult­ed in the with­hold­ing of bud­getary fi­nanc­ing.

Ja­maica's Fi­nance Min­is­ter, Dr Pe­ter Phillips, has in­di­cat­ed that a team from the IMF is ex­pect­ed in Ja­maica at the end of Feb­ru­ary for the pur­pose of gath­er­ing the in­for­ma­tion that will form the ba­sis of the ne­go­ti­a­tions. No time­line has been giv­en for the end of this ex­er­cise.

St Kitts and Nevis: The ex­ec­u­tive board of the IMF an­nounced on Jan­u­ary 25 that they com­plet­ed the first re­view of St Kitts and Nevis' eco­nom­ic per­for­mance un­der its SBA. The com­ple­tion of the re­view al­lows the im­me­di­ate dis­burse­ment of an amount equiv­a­lent to about US$17.6 mil­lion, bring­ing to­tal dis­burse­ments un­der the arrange­ments to about US$51.6 mil­lion. The St Kitts and Nevis' au­thor­i­ties are mak­ing progress on ne­go­ti­a­tions with their cred­i­tors for the com­pre­hen­sive re­struc­tur­ing of the pub­lic debt. Ear­ly im­ple­men­ta­tion of the debt re­struc­tur­ing will be crit­i­cal for the suc­cess of the pro­gramme.

T&T: In their lat­est re­port on T&T is­sued on Jan­u­ary 27, Stan­dard and Poor's in­di­cat­ed that the coun­try's rat­ings and rat­ing out­look has re­mained un­changed at A/Sta­ble. The re­port high­light­ed the coun­try's low net gen­er­al gov­ern­ment debt, long-last­ing po­lit­i­cal sta­bil­i­ty and a gen­er­al­ly pru­dent macro­eco­nom­ic frame­work among its strengths. Among the coun­try's weak­ness­es, the agency not­ed the high de­pen­dence on the en­er­gy sec­tor and slow pace of re­form im­ple­men­ta­tion, leg­is­la­tion en­act­ment, and de­ci­sion-mak­ing. Stan­dard and Poor's not­ed that: "The sta­ble out­look re­flects our ex­pec­ta­tion that the gov­ern­ment will be suc­cess­ful in stim­u­lat­ing growth in 2012."

Cred­it rat­ings

Fitch Rat­ings down­grad­ed the cred­it rat­ings of five Eu­ro­zone coun­tries by one notch last week. The af­fect­ed coun­tries (and their re­vised rat­ings) are Italy (A-), Spain (A), Bel­gium (AA), Slove­nia (A) and Cyprus (BBB-). Fitch af­firmed their rat­ing of Ire­land at BBB+.

Week­ly in­ter­na­tion­al eq­ui­ty watch

US stocks close week flat

While the 2.8 per cent US GDP growth rate record­ed for the fourth quar­ter of 2011 was the high­est fig­ure seen since the sec­ond quar­ter of 2010, stock in­dices end­ed the week mixed as the read­ing missed an­a­lyst ex­pec­ta­tions.

The S&P 500 in­dex end­ed the week flat at a close of 1,316.33. The ma­te­ri­als and fi­nan­cials in­dex con­tin­ue to be the best per­form­ing sec­tors ris­ing by 11.03 per cent and 8.60 per cent, re­spec­tive­ly, year-to-date, as at Jan­u­ary 27.

Large-cap stocks al­so saw a week­ly de­cline, falling by 0.47 per cent with the Dow Jones in­dex clos­ing at 12,660.50. The tech-heavy Nas­daq saw a rise of 1.07 per cent for the week to a close of 2,816.55.

Year-to-date, the S&P 500 is up 4.67 per cent de­spite the less than op­ti­mistic out­look on the econ­o­my as in­di­cat­ed by the Feds' de­ci­sion to hold rates low­er for longer.

Eu­ro­pean stocks fall on US da­ta

Eu­ro­pean stocks fell for the first time in six weeks on the re­lease of the less than fore­cast US fourth quar­ter GDP fig­ure as talks con­tin­ued on Greece and its debt swap deal. The Stoxx Eu­rope 600 In­dex fell 0.18 per cent week-on-week to 255.40. Ger­many's Dax in­dex closed 1.68 per cent high­er, hav­ing ex­pe­ri­enced a dai­ly drop on Jan­u­ary 27 as Daim­ler AG and Volk­swa­gen AG led de­clines among Eu­ro­pean car­mak­ers. UK's FTSE 100 in­dex re­mained flat over the week at a close of 5,733.45 .

TTSE Com­pos­iteIn­dex sees YTD loss

The Com­pos­ite In­dex saw a mar­gin­al de­crease dur­ing the week end­ing Jan­u­ary 27, falling by 0.48 per cent to a val­ue of 1,007.47, as sev­en stocks ad­vanced and three de­clined.

Trinidad Ce­ment Ltd (TCL) was the week­ly vol­ume leader with 377,651 shares trad­ing at a clos­ing price of $1.80. Sco­tia­bank T&T Ltd (SBTT) saw the largest price ap­pre­ci­a­tion ris­ing by 0.95 per cent dur­ing the week to a close of $51.

Guardian Hold­ings Ltd (GHL) saw the largest price de­cline falling by 6.35 per cent dur­ing the week to a close of $13.56.

Year-to-date, the TTSE Com­pos­ite In­dex is down 0.48 per cent.

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