[MARKET ANALYSIS] Gilts look to today's UK Cabinet Meeting to see if anyone makes a move against PM Starmer

External leads are mildly bearish, given the upward bias in energy benchmarks after the overnight geopolitical rhetoric. More pertinently for Gilts, though, is reporting that four cabinet ministers, including the Home Secretary, Deputy PM and Foreign Minister, have pushed for PM Starmer to outline a timetable to step down and ensure an orderly transition of power, according to multiple outlets. Most recently, Politico reported that some ministers within the cabinet will make their move today. Reporting that adds to political uncertainty and will enhance the bearish skew. As such, the focus is now on if Starmer will agree to this or fight. If he gives in, when Starmer will announce the decision, what the time period for the transition will be and if he will endorse someone in any leadership contest, or if he will try and partake in it himself; we may get more details after this morning’s cabinet meeting. From this, the timeline point is notable as it is going to take at least a few weeks for Greater Manchester Mayor Burnham to engineer a route into the House of Commons. For markets, aside from Starmer, the main focus is on the Chancellor, as any replacement who would take a looser approach to fiscal rules (i.e. more left-leaning) would undoubtedly weigh on the benchmark and bid yields. Thus far, reporting around the Chancellor is limited, with the focus primarily on Starmer, but it is certainly one to watch. Technically, Gilts closed out Monday with losses of 89 ticks at a 86.85 trough. We firstly look to Monday’s 86.50 low, before relatively notable support between 85.90-91 and then the contract low of 85.76. For the 10yr yield, that ended Monday at a 5.029% peak. Looking to 5.107% from the 5th of May, before 5.118% from March 23rd, which is also the YTD peak.