JGBs Mixed; May Track U.S. Treasurys
0019 GMT — JGBs are mixed, but may track overnight price gains in U.S. Treasurys. Both JGBs and Treasurys tend to move in tandem. For today, the Japanese Ministry of Finance's auction of 2.6 trillion yen in 10-year JGBs could be digested smoothly, Citi Research's Tomohisa Fujiki says in a research report. The underperformance of the 10-year yield on the curve and the level of the yield should be supportive, the rates strategist says. Investors may look to sell 30-year JGBs in a bull market and 5-year sovereign notes in a bear market, Fujiki adds. The 2-year JGB yield is unchanged at 0.825%; the 5-year yield is up 0.5bp at 1.045%; the 10-year yield is down 0.5bp at 1.400%. (ronnie.harui@wsj.com)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
4 hours ago
- Yahoo
UBS shares slide 7% after analysts say Swiss capital rules put buybacks at risk
By Tommy Reggiori Wilkes LONDON (Reuters) -Shares in UBS dropped 7% on Tuesday as analysts voiced concern about the impact of new government proposals to force the Swiss lender to hold $26 billion in extra capital, including on the bank's plans to return cash to shareholders. UBS' stock had risen after the government on Friday announced its proposals to prevent another Credit Suisse-style meltdown. But on Tuesday the shares reversed those gains and fell sharply. By 1235 GMT they were down 6.6% at 26 francs, set for their biggest one-day drop in two months. Swiss markets were closed on Monday. The bank's capital returns to investors for 2026 and beyond remain uncertain, Deutsche Bank analysts said in a note, even as UBS on Friday reaffirmed its intention to return $3 billion in capital this year. Traders also cited worries about the impact on UBS's buyback plans as a reason for the share price fall. JP Morgan analysts said they had already lowered their buyback estimates to $3.5 billion from $6 billion for next year, and to $4 billion from $8 billion in 2027, because the Swiss proposals were the "worse-case scenario". "We are thus already pricing the worst case scenario, leaving upside from any improvement in the final rules. We think with the share price reaction today, UBS shares have priced these proposals more than enough," they said on Tuesday. Others disagreed about the likely impact on buybacks. UBS should be able to manage the extra capital demands without affecting future buybacks and dividends, Citi analysts said. But they were worried about the rules being amended as they move through a consultation and legislative process, and about UBS' consensus earnings momentum, "which continues to be weaker than peers on ongoing NII (net interest income) softness." Uncertainty over the capital requirements have clobbered UBS shares. So far this year the stock has lost nearly 9%, against a 30% rally in a European banking share index. While the government proposals confirmed some of UBS' worst fears, the bank will have six to eight years to prepare for them becoming law, a time in which the rules may change. UBS executives say the additional capital burden will put the Zurich-based bank at a disadvantage to rivals and on Friday called the requirements "extreme" and "neither proportionate nor internationally aligned." Switzerland's Finance Minister Karin Keller-Sutter said the measures were crucial for financial stability and would protect taxpayers. (Additional reporting by Danilo Masoni in Milan and Siddarth S in Bengaluru; Editing by Amanda Cooper and Hugh Lawson)
Yahoo
6 hours ago
- Yahoo
Platinum surges, palladium lags on narrow demand profile
By Anushree Mukherjee and Kavya Balaraman (Reuters) -Platinum and palladium prices have both rallied this month, notching a more than four-year and seven-month high respectively, but analysts say they remain more cautious about the outlook for palladium due to its narrower demand base. Spot platinum was trading at $1,272.45 per ounce as of 1545 GMT on Wednesday, its highest level since February 2021, and has risen 41% this year on supply concerns, renewed investor interest following London Platinum Week in May, and increased jewellery demand as high gold prices drive consumers to cheaper alternatives, analysts say. Spot palladium, meanwhile, was trading at $1,078.62/oz, its highest level since November 2024, and has gained 18% this year, but has struggled to reach the high of $1,244.75 hit in October 2024. "The biggest factor is likely the wider appeal which platinum enjoys. Platinum's uses are more diverse, spanning industrial applications, jewelry, and investor demand," said Zain Vawda, market analyst at MarketPulse by OANDA. "This diversification shields platinum from the headwinds palladium faces, such as declining long-term demand from the traditional automotive market due to the EV transition." Palladium is mainly used in catalytic converters for gasoline vehicles, while platinum has broader uses in diesel catalytic converters, jewellery, industrial applications, and emerging hydrogen technologies. PALLADIUM PRICES LAGGING Palladium could be considered a "one trick pony", with 90% of its demand coming from car manufacturers, Bank of America said in a note last week. "China's rising EV penetration rates are particularly damaging because it means that palladium-intensive cars with a gasoline engine are now being quickly displaced," the note added. The transition to EVs will also affect platinum in the medium term, but to a lesser extent, analysts told Reuters. "Large commercial vehicles will likely use larger amounts of platinum (relative to palladium) and these vehicles will be slower to electrify. Over time, the hydrogen economy will also absorb some platinum, limiting the downside risk on platinum versus palladium," said Nitesh Shah, commodities strategist at WisdomTree. Global sales of battery-electric vehicles and plug-in hybrids rose to 1.5 million in April. Sales in China were up 32% from the same month of 2024 to 0.9 million vehicles. PLATINUM RALLIES Platinum, meanwhile, is expected to be moderately supported over the next six to 12 months, although the upside may be capped without a clear rebound in auto demand or meaningful acceleration in hydrogen-related applications, said Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany. Platinum jewellery demand is likely to continue benefiting from high gold prices, analysts said. "We believe that platinum will retain recent gains and could rise a little further as gold and silver gain. We are less confident that palladium will go much higher until turbulence in the auto industry settles," Shah added. Gold has surged 27% this year, touching multiple record highs, while silver has risen 26% in 2025. Sign in to access your portfolio
Yahoo
6 hours ago
- Yahoo
Platinum surges, palladium lags on narrow demand profile
By Anushree Mukherjee and Kavya Balaraman (Reuters) -Platinum and palladium prices have both rallied this month, notching a more than four-year and seven-month high respectively, but analysts say they remain more cautious about the outlook for palladium due to its narrower demand base. Spot platinum was trading at $1,272.45 per ounce as of 1545 GMT on Wednesday, its highest level since February 2021, and has risen 41% this year on supply concerns, renewed investor interest following London Platinum Week in May, and increased jewellery demand as high gold prices drive consumers to cheaper alternatives, analysts say. Spot palladium, meanwhile, was trading at $1,078.62/oz, its highest level since November 2024, and has gained 18% this year, but has struggled to reach the high of $1,244.75 hit in October 2024. "The biggest factor is likely the wider appeal which platinum enjoys. Platinum's uses are more diverse, spanning industrial applications, jewelry, and investor demand," said Zain Vawda, market analyst at MarketPulse by OANDA. "This diversification shields platinum from the headwinds palladium faces, such as declining long-term demand from the traditional automotive market due to the EV transition." Palladium is mainly used in catalytic converters for gasoline vehicles, while platinum has broader uses in diesel catalytic converters, jewellery, industrial applications, and emerging hydrogen technologies. PALLADIUM PRICES LAGGING Palladium could be considered a "one trick pony", with 90% of its demand coming from car manufacturers, Bank of America said in a note last week. "China's rising EV penetration rates are particularly damaging because it means that palladium-intensive cars with a gasoline engine are now being quickly displaced," the note added. The transition to EVs will also affect platinum in the medium term, but to a lesser extent, analysts told Reuters. "Large commercial vehicles will likely use larger amounts of platinum (relative to palladium) and these vehicles will be slower to electrify. Over time, the hydrogen economy will also absorb some platinum, limiting the downside risk on platinum versus palladium," said Nitesh Shah, commodities strategist at WisdomTree. Global sales of battery-electric vehicles and plug-in hybrids rose to 1.5 million in April. Sales in China were up 32% from the same month of 2024 to 0.9 million vehicles. PLATINUM RALLIES Platinum, meanwhile, is expected to be moderately supported over the next six to 12 months, although the upside may be capped without a clear rebound in auto demand or meaningful acceleration in hydrogen-related applications, said Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany. Platinum jewellery demand is likely to continue benefiting from high gold prices, analysts said. "We believe that platinum will retain recent gains and could rise a little further as gold and silver gain. We are less confident that palladium will go much higher until turbulence in the auto industry settles," Shah added. Gold has surged 27% this year, touching multiple record highs, while silver has risen 26% in 2025.
