Our latest update on hurricane Sandy can be found here. As forecast, Hurricane Sandy made landfall on Jamaica as a category 1 hurricane with maximum sustained winds of 80mph. Fueled by warm waters around Jamaica Sandy intensified before landfall, lashing the islands shanty towns. After Jamaica, Cuba is the next destination to feel the full force of Sandy and at this time the hurricane has intensified further into a category 2 storm with maximum sustained winds of 110mph.
On Jamaica, at least 55,000 people were evacuated to safer ground, predominantly because of the risk of severe flooding. Hurricane Sandy was expected to cause significant rainfall totals on Jamaica and Cuba, with some forecasts citing totals around the 20 inch mark. A storm surge of 6 foot was expected on Jamaica and Cuba and damaging waves could cause further destruction along coastal areas.
One person was killed in Jamaica and there have been reports of damage to some properties. Around 70% of the island was said to be without power at one point. There has also been a report of a death in Haiti caused by flooding from Sandy.
Hurricane Sandy is now making landfall on Cuba just 8km to the west of Santiago de Cuba, the country’s second largest city. Sandy is expected to cross Cuba, bringing high rainfall totals and the risk of flooding and landslides within the next few hours.
After Cuba, Sandy will head towards the Bahamas. At this time it is uncertain how powerful a hurricane Sandy will be, but it will likely still be at least category 1. From there on there is considerable uncertainty in hurricane Sandy’s path.
The southeast tip of Florida is now under a tropical storm watch. Given the size of Sandy any movement to the west will bring tropical storm force winds to the U.S. east coast. As well as Florida, North Carolina expects some bad weather due to hurricane Sandy.
Forecast models diverge on the eventual destination for hurricane Sandy. Some models show a recurve onto the U.S. east coast, anywhere from Washington north and some forecasters say it is not clear whether Sandy will curve at all or whether the hurricane will head directly north through the Bahamas which would bring it ashore further south. Most models however show a gradual move to the east, tracking the U.S. coastline before heading into the Atlantic.
Given the level of uncertainty in the forecast there could well be some secondary trading of exposed U.S. hurricane catastrophe bonds as Sandy approaches. At the moment we don’t expect this to be a significant volume, but should the forecast for the U.S. coast worsen over the next 24 hours as Sandy clears Cuba then there is a chance we could see some fairly significant pricing changes, as we did during Irene’s approach, although we wouldn’t expect anywhere near as much fluctuation (at the moment). We have heard reports of some sales of U.S. east coast exposed cat bonds at attractive prices yesterday so there is, as always with a liquid market, a chance for speculation as well.
We’ll update you if the forecast changes considerably and you can always keep up to date with our interactive tracking map here.
Hurricane Sandy’s current location and forecast path can be seen below, and underneath that another view showing the forecast model divergence:
Current position and forecast model divergence at 2am ET: