US Real Estate and UK Labour Market in Focus 

Bloomberg runs with an interesting story this morning, citing the plight of commercial real estate owners. They say that 20% of outstanding debt on commercial real estate will mature this year and therefore need refinancing.

Commercial property usually has a much shorter financing tenor than residential mortgages but still, this will be a shock of coming from near zero rates to something that probably starts with a four point Something or, if you’re lucky a three point something.

The total debt pool coming due is $929bn and it’s the banks who are the largest holders of this debt, with $441bn of loans mature over the course of 2024. The number is massive compared to other years because they had previously extended or delayed the refinancing, kicking the can down the road. It’s not clear how much they’ll be able to delay, or whether they’ll back the Fed to deliver cuts and do some short-term refinancing, soak up the pain and then hope that rates fall more materially into 2025.

In the Middle East, there are set to be talks between Mossad, the CIA, Egypt and Qatar today, in a bid to revive negotiations over the release of hostages and agree a long pause in fighting.

The talks come against a backdrop of Israeli offensive action in Rafah, which has upwards of a million people in the city.

There’s hope that with the head of Mossad travelling to Egypt for the talks, there could be some softening to Netanyahu’s very hard stance, which has come under a lot of criticism and pressure from just about everywhere. According to a diplomat briefed on the talks; “the discussions have been constructive and there’s a willingness to compromise…the key elements of the deal are on the table…there are gaps that remain”.

The last proposal from Hamas was that all hostages would be freed over a four-and-a-half-month ceasefire and in exchange Israel would free 1,500 prisoners (500 of which are serving life sentences). Clearly this deal didn’t go through, but because of the duration of the ceasefire, not necessarily because they’d have to give up so many prisoners. The FT has more, click here to read.