Meanwhile, Germany’s DAX fell 0.1% — Ganesh Rao Why are UBS shares rallying after the Swiss government proposed tough new capital rules?
Shares of the bank jumped as much as 6% after Switzerland announced highly-anticipated capital regulations calling on UBS to hold an additional $26 billion in Common Equity Tier 1 (CET1) capital.
— Ganesh Rao Why are UBS shares rallying after the Swiss government proposed tough new capital rules?
“The SNB does not engage in any manipulation of the Swiss franc,” the Swiss National Bank said in a statement on Friday.
Euronext operates exchanges in several European markets, including Paris, Amsterdam, Brussels and Milan.
The ECB rate cut and the upward revision of the first-quarter eurozone GDP this week caused European stock markets to rise.
The U.S. and the Stoxx Europe 600 index. The K. FTSE 100 gained 0.3 percent. The CAC 40 for France was up 0.2 percent. Germany’s DAX, meanwhile, dropped 0.1 percent.
— Rao Ganesh.
After the Swiss government proposed strict new capital rules, why are UBS shares rising?
It’s possible that JPMorgan analysts know the answer as well.
In a note to clients, Kian Abouhossein, an analyst at JPMorgan, stated, “Today’s outcome is positive for UBS, based on our initial view, although we need to go through the full set of documents, due to the long timeframe for implementation in our view.”.
Following Switzerland’s announcement of much-awaited capital regulations requiring UBS to hold an additional $26 billion in Common Equity Tier 1 (CET1) capital, the bank’s shares surged as much as 6%.
But the full implementation of the regulations won’t happen until 2033. The law would be finalized by 2027 at the latest, and the amendments would be put into effect within six years.
Analysts for the Wall Street bank predicted that UBS would make about $12 billion [per year] in profits and pay out about $3 billion in dividends. This would allow the bank to “fulfill its ‘capital gap’ by 2033+ and still continue with buybacks.”. “.”.
Rao Ganesh.
What caused UBS’s stock to rise after the Swiss government suggested stricter new capital regulations?
Following Switzerland’s announcement of much-awaited capital regulations requiring UBS to hold an additional $26 billion in Common Equity Tier 1 (CET1) capital, the bank’s shares surged as much as 6%.
The proposals are “as bad as it will get for UBS,” according to Johann Scholtz, senior equity analyst at Morningstar, but that might give the bank some leeway to negotiate concessions.
As anticipated, UBS will implement this gradually, with the earliest full implementation date being 2034, according to Morningstar senior equity analyst Johann Scholtz.
But he also said, “Negotiations will begin immediately.”. According to the analyst, this implies that UBS “can now lobby for some concessions and take some actions themselves to mitigate impact, for instance upstream some excess capital from its subsidiaries.”.
— Ganesh Rao.
Following a review conducted in order to prevent a full-blown banking crisis in Switzerland, Credit Suisse and UBS were forced to merge.
“To enable the AT1 bond holdings to be reduced by approximately USD 8 billion, the increase in the going-concern requirement must be satisfied with up to USD 26 billion of CET1 capital,” the government stated in a statement on Friday, referring to UBS’s holdings of Additional Tier 1 (AT1) bonds.
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Ganesh Rao.
Thursday, the U. S. On a “monitoring list” of trading partners, the Treasury Department added nine economies “whose macroeconomic policies and currency practices merit close attention.”. “.”.
In the year 2020, the U. S. . Switzerland was accused of intentionally devaluing the Swiss franc against the US dollar by Treasury, which designated it a currency manipulator during the first Trump administration. S. The dollar. On Thursday, the department avoided using the word “currency manipulator.”.
“The SNB does not engage in any manipulation of the Swiss franc,” the Swiss National Bank stated in a statement released on Friday. “It does not aim to give the Swiss economy unfair competitive advantages or to stop changes in the trade balance. “,”.
According to a SNB spokesperson, the Swiss economy recently experienced disinflation as a result of a soaring Swiss franc that reduced the cost of imports. If necessary, the SNB may need to intervene in foreign exchange markets.
The safe-haven Swiss franc has appreciated about 9 percent versus the U.S. A. The currency’s most recent price against the US dollar was 0.2 percent lower this year.
Find out more about the story here.
— Taylor Chloe.
Today, Stéphane Boujnah, the CEO of Euronext, stopped by the CNBC studio in London to discuss regional markets with the “Squawk Box Europe” anchors.
“Before the Trump moment,” he said, interest in Europe had begun to increase, but volatility brought on by tariffs exacerbated the trend.
“Many people concluded that Europe is not a bad place if you want to have your money in a predictable environment, in an environment where the fundamental tenets of capitalism operate, and in an environment where the rule of law is upheld,” Boujnah stated. People shorted you as a result of that. A. possessions to relocate to Europe. It wasn’t huge, but it’s important and ongoing. “.”.
Paris, Amsterdam, Brussels, and Milan are just a few of the European markets where Euronext runs exchanges.
Taylor, Chloe.
Interest rates will be lowered to 20% from 21% for the first time since September 2022, according to the Bank of Russia.
It stated that the April inflation rate was 6 points 2 percent, which was lower than the average of 8 points 2 percent for the first quarter of 2025.
“The Russian economy is gradually returning to a balanced growth path, even though domestic demand growth is still outpacing the ability to expand the supply of goods and services,” the central bank said Friday. It also stated that monetary policy would remain tight “for a long period” in order to bring inflation back to its target of 4 percent.
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— Jenni Reid.
In case it was lost on you, the argument between U. S. . Overnight, Elon Musk, the richest man in the world, and President Donald Trump ventured into uncharted territory.
Musk publicly criticized Trump’s spending bill, which sparked a heated argument between the two. The president has threatened to revoke government contracts worth billions of dollars for Musk’s businesses.
Musk, on the other hand, asserted that without his involvement in the campaign, Trump would never have been elected to a second term in office and that SpaceX would immediately decommission its Dragon spacecraft as a result of Trump’s funding cuts.
In the aftermath, Tesla’s market value dropped by $152 billion, the largest decline in the company’s history.
— Taylor Chloe.
Salutations from London this morning.
As traders worldwide await more important data for hints on the U.S.’s shape, European stocks appear destined to decline in the week’s final trading session. S. . economics.
Futures linked to the German DAX and the French CAC 40 are down 0 points 1 percent and 0 points 4 percent, respectively, while futures linked to the FTSE 100 are currently down 0 points 1 percent.
After the European Central Bank made the much-awaited decision to lower interest rates, regional stocks ended Thursday’s session higher.
U. A. Economists anticipate a decline in jobs from the previous month when nonfarm payroll data is released later on Friday.
Global investors are still concerned about trade tensions following the U.S. S. On Thursday, President Trump and Chinese President Xi Jinping had a conversation. The 90-minute call was “very good,” according to Trump, and “almost entirely” centered on trade.
Taylor, Chloe.
