International News (Issue 407) – 8 July 2016

International News – 8 July 2016

In the UK the aftermath of BREXIT was felt across the property sector with major British REIT’s, insurers and banks all falling further during the week.

The driver for these falls was news that 5 or 6 major British property funds had restricted client redemptions in the wake of the BREXIT decision.

Fears that the City of London would see a major exodus of talent and resultant collapse in office demand and rents, is the apparent driver.

One major property fund chose to mark the value of its $1bn+ fund down by 17% to reflect the move, in the clearest indication yet of the financial impact of BREXIT on asset values.

The BREXIT after-shocks will continue.

In the US this week in spite of the negativity in Europe, the report for June service sector activity actually showed its biggest jump in 8 years.

Furthermore, the ADP payrolls report pointed to another strong month of hiring.
The near term Federal Reserve concern for events in Europe seemed warranted, but this data seems to point more firmly at a strengthening in US domestic demand and seems at odds with the fall in US treasury yields to record lows this week.

Again, forgive me for my brevity – if you’ve read this deep into the note I will level with you – I actually have an 8 year old and an 11 year old on my shoulder as I was meant to have the day off, and they’re not overly happy with me!

Hope that made you smile as I am sure you have all been there.

Have a terrific weekend team.

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