Panmure Liberum is a new force in UK Investment Banking and Corporate Broking

In his recent address to the World Economic Forum in Davos, President Trump was unequivocal. “I'll demand that interest rates drop immediately. And likewise, they should be dropping all over the world”. These two sentences moved bond market interest rates further off their pre-Inauguration highs. The US President’s lack of nuance is perhaps his greatest communication gift. For central bankers skilled in conditional linguistics this is quite the culture clash. Trump parked his hulking snowplough on the manicured piste of the world’s central banks. It looks like this piece of heavy machinery is unlikely to shift for four years. For a man who made his name in highly-leveraged real estate deals, Trump’s preference for cheaper money and lower interest rates appears inevitable.

As California wildfires continue to develop, Panmure Liberum updates its economic and insured loss estimates. The economic losses are likely to be the largest on record for the state at c.$250-275bn. This compares to a total of c.$185bn economic losses across all of California’s wildfires in 2018.

By Joachim Klement, Head of Strategy

As I write this, we are emerging from a several-month period when 10-year government bond yields in the US, eurozone and the UK rose sharply despite central banks trying to cut interest rates. There are all kinds of drivers behind this development, like higher than expected inflation, stronger than expected jobs data and others. My missives aren’t about current market events, but rather designed to take a step back and look at the bigger picture, so let’s do that. How has the trend in long-term bond yields changed? And what does that say about government financing costs and long-term bond yields in the next couple of years?