Caribbean Bonds Steady as Global Equities Grind Higher

Waterloo Group
May 3
6 min read

Caribbean Bonds Steady as Global Equities Grind Higher

May 2, 2026

Dave Dookie, Managing Director

Global monetary policy remains in a “higher-for-longer” phase, with gradual and data-dependent rate easing expected to begin more meaningfully into 2027.
Major equity markets continue to show resilience, led by strong U.S. performance, while Europe remains stable and Asia exhibits mixed trends amid China growth concerns.
Elevated energy prices, particularly oil and natural gas, are supporting global growth in energy-exporting economies like Trinidad and Tobago but also sustaining inflation pressures globally.
Caribbean fixed income markets remain stable, with clear yield differentiation across credit quality, as Trinidad and Tobago maintains its position as a relatively strong investment-grade credit.
Strong domestic liquidity in Trinidad and Tobago continues to anchor low interest rates and support demand for bonds, reinforcing a favorable environment for income-focused investment strategies.

Global Interest Rate Outlook

Global monetary policy continues to point toward a “higher-for-longer, then gradual easing” cycle. In the United States, interest rates are expected to remain elevated through much of 2026, as inflation while moderating, remains above target due to persistent wage growth and strong consumer demand. Rate cuts are likely to be cautious and data-driven, with a more meaningful easing cycle potentially emerging in 2027.

In the United Kingdom, inflation dynamics remain more complex, particularly within services, suggesting a slower pace of easing compared to the U.S. Meanwhile, the Eurozone may begin modest rate reductions earlier given weaker economic growth, although policymakers remain vigilant to energy-related inflation risks. Across Asia, policy divergence persists, with Japan gradually normalizing monetary policy and China maintaining accommodative conditions to support growth.

In Trinidad and Tobago, the outlook remains anchored by strong domestic liquidity. With excess reserves exceeding TT$4.1 billion, short-term rates remain suppressed, allowing the Central Bank to maintain a broadly neutral stance. Any normalization in domestic rates is expected to lag global cycles, reinforcing a stable, income targeted investment environment.

Global Market Performance

Global markets delivered a relatively constructive performance over the past week, supported by resilient U.S. equities and stable commodity prices.

U.S. markets posted moderate gains, with the S&P 500 rising 0.92%, the Nasdaq Composite advancing 1.12%, and the Dow Jones Industrial Average increasing 0.55%. Gains were led by technology, industrial, and energy sectors, while year-on-year returns remain strong exceeding 20%, highlighting the durability of the U.S. economic expansion.

European markets were broadly stable, with the STOXX 600 up 0.15% and Germany’s DAX gaining 0.68%. In Asia, performance was mixed, as Japan’s Nikkei 225 rose 0.63%, while Hong Kong’s Hang Seng declined 0.78% amid continued concerns surrounding China’s growth outlook.

Commodity markets remain central to the global macro narrative. Brent crude oil prices continue to trade above US$108 per barrel, while natural gas prices recorded modest gains.

For Trinidad and Tobago, elevated energy prices are supportive, strengthening fiscal revenues, improving external balances, and boosting foreign exchange inflows. However, higher energy prices also contribute to global inflation pressures, potentially delaying the pace of monetary easing in developed markets.

Caribbean Fixed Income Markets

Caribbean bond markets remain stable, with clear differentiation across credit quality. Trinidad and Tobago continues to trade as a relatively strong investment-grade credit, with sovereign yields ranging between approximately 5.3% and 6.2% across the curve.

Shorter maturities offer lower yields in the 4.3% to 5.4% range, while longer dated bonds approach 6.0% to 6.2%.In contrast, lower-rated Caribbean credits such as Barbados and Jamaica offer higher yields, generally between 6.0% and 6.8%, reflecting elevated credit risk.

Corporate bonds in Trinidad and Tobago remain attractive, particularly in the energy sector. Heritage Petroleum’s 2029 bond continues to yield above 8%, while issuers such as Trinidad Generation Unlimited and TSTT offer yields between 6.5% and 8.0%, providing a premium over sovereign bonds.

Domestic Liquidity Conditions

Liquidity in Trinidad and Tobago remains highly accommodative. Excess reserves in the banking system increased to approximately TT$4.161 billion, continuing to anchor local interest rates and support demand for fixed income securities.

The absence of significant liquidity withdrawals via Open Market Operations further contributed to stable market conditions, reinforcing strong investor demand for government and high-quality corporate bonds.

The Trinidad and Tobago equity market experienced a notable increase in trading activity, with volumes rising 130% and total market value increasing 118% to TT$38.97 million.

Market performance was mixed, with the Composite Index advancing 0.41%, while the All-Trinidad and Tobago Index declined slightly by 0.09%. The Cross-Listed Index outperformed, rising 1.93%, supported by regional financial stocks.

Trinidad Cement Limited emerged as the top performer, gaining 27.21%, while financial stocks such as NCB Financial Group and JMMB Group also recorded gains. On the downside, National Enterprises Limited declined 12.55%, with modest losses observed in Massy Holdings and National Flour Mills.

Overall market breadth remained positive, with advancing stocks outpacing decliners, and dividend activity continuing to support investor interest in income-generating equities.

Investment Opportunities

The current environment continues to favor a balanced allocation strategy. U.S. equities remain supported by strong earnings momentum and sector leadership, while

Caribbean fixed income, particularly Trinidad and Tobago sovereign and quasi-sovereign bonds offer attractive risk-adjusted returns and portfolio stability.

Investors should remain attentive to key risks, including global interest rate trajectories, commodity price volatility, and geopolitical developments. However, the broader outlook remains constructive, supported by stable regional fundamentals and resilient global markets. The past week underscores the persistence of key market themes: resilient global equities, stable but differentiated fixed income markets, and strong liquidity conditions in Trinidad and Tobago.

Investors are encouraged to maintain diversified portfolios, focusing on quality assets and income generation, while remaining opportunistic across both global and regional markets.

About the author: Dave Dookie is the Managing Director of Waterloo Capital Advisors Limited, a Trinidad and Tobago based financial advisory firm specializing in investment management, capital markets and structured finance. He has advised governments, financial institutions, and energy companies on debt issuance, project financing, and strategic capital raising across the Caribbean. He holds degrees and advanced qualifications from the London School of Economics and Political Science (LSE) and the University of London and has completed advanced training in data science through the MIT Applied Data Science Program.

Disclosure, Conflicts of Interest & Important Information

This publication has been prepared and issued by Waterloo Capital Advisors Limited (“Waterloo Capital”) for informational and market commentary purposes only. The material contained herein does not constitute, and should not be construed as, investment advice, a recommendation, or an offer or solicitation to buy or sell any security, financial instrument, or to participate in any investment strategy. The information contained in this report has been obtained from publicly available sources and other third-party data believed to be reliable, including financial market data providers, government publications, and industry sources. While Waterloo Capital has made reasonable efforts to ensure the accuracy and completeness of the information presented, no representation or warranty, express or implied, is made as to its accuracy, reliability, or completeness. Any opinions, projections, or forward-looking statements expressed herein reflect the judgment of Waterloo Capital as of the date of publication and are subject to change without notice.

Investments in financial markets involve risks, including the possible loss of principal. Past performance is not indicative of future results, and market conditions may change rapidly. Economic forecasts, price projections, and market outlooks are inherently uncertain and should not be relied upon as guarantees of future performance.

Waterloo Capital Advisors Limited, its affiliates, directors, officers, employees, and associated persons may from time to time have positions in securities, commodities, currencies, or other financial instruments referenced in this publication. In addition, Waterloo Capital may provide, or seek to provide, investment banking, capital markets advisory, asset management, research, or other financial services to companies, governments, or institutions mentioned in this report. Such activities may give rise to potential conflicts of interest.

Recipients of this publication should not treat it as a substitute for the exercise of their own independent judgment. Investors should consider the appropriateness of any investment strategy in light of their individual objectives, financial circumstances, and risk tolerance, and should seek independent professional advice, including financial, legal, tax, or accounting advice where appropriate. This report is intended solely for general informational distribution and may not be reproduced, redistributed, or published in whole or in part without the prior written consent of Waterloo Capital Advisors Limited. The distribution of this publication may be restricted by law in certain jurisdictions, and persons into whose possession this report comes are required to inform themselves of and observe any such restrictions.

Waterloo Capital Advisors Limited accepts no liability whatsoever for any direct, indirect, incidental, or consequential loss or damage arising from the use of, or reliance on, the information contained in this publication.