EU FINANCIALS: UBS Faces Additional Capital Requirements
"*UBS FACES EXTRA $26B CAPITAL REQUIREMENT UNDER SWISS PROPOSAL
*SWISS PROPOSE 100% BACKING OF CAPITAL IN BANKS' FOREIGN UNITS
*Swiss Government Says Too Big to Fail Regime Needs to Be Improved" - BBG
This is right at the upper end of the range of forecasts we previously discussed - https://mni.marketnews.com/4jHZdjc
Currently UBS CET1 is in the Mid 14%'s, this would bring the requirement up to around 15.5% (back of the envelope) - which is around 40-50% higher than most peers.
Initial equity reaction is positive, suggesting market may have been braced for worse.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
CROSS ASSET: Estoxx Futures closes the Gap, Bund test a new high
- Estoxx futures has now closed the Opening gap down to 5209.00, not a Tech level.
- This latest push lower helps Bund print a new intraday high, but no real trigger for the move, mostly some order related flow, and a continuation since Bond went bid post the French Auctions this Morning.
- Support in VGM5 is at 5178.00, this is only Yesterday's low.
US TSY OPTIONS: Large Weekly 5yr Put Option
Large Weekly 5yr downside Option:
- FVA (weekly, expiry 12th May) 107.25p, bought for 00+ in ~42.4k.
GILTS: Off Highs, Post-Auction Momentum Stalls
Gilts hold the bulk of the rally detailed earlier, backing away from session highs over the last couple of hours after the post-auction momentum stalled.
- Futures have traded as high as 93.32, well shy of next resistance at the May 2 high (93.93). Last 93.24.
- Yields 2-5bp lower on the day, ~1bp off session lows, flattening bias maintained, last week’s yield lows intact/unchallenged across the curve.
- 2s10s ~13bp below closing cycle highs, 5s30s ~8bp below closing cycle highs.
- Spread vs. Bunds continues to oscillate in the 195-200bp closing range witnessed over the last 3 sessions
- Domestic headline flow remains limited, with external cues set to dominate between now and tomorrow’s BoE decision.
