Societe Generale strategists observe that GBP/USD (Cable) selling has stalled as UK political uncertainty persists, with Prime Minister Starmer facing a potential leadership challenge. They expect Cable to find support around its 100-day moving average, with the 200-day moving average below, while June Monetary Policy Committee (MPC) pricing remains steady despite elevated Gilt yields.

Cable steadies as politics swirl

"In the UK, PM Starmer is staying put, rejecting calls by a growing number of Labour party MPs and four cabinet ministers to set a timetable to leave by September. The PM will meet Health Secretary Wes Streeting today before the King’s Speech."

"The threshold of 81 MPs has been met which implies that a leadership challenge could be launched anytime with the timing set by the NEC. Allies of Streeting believe he has a brief window of opportunity to contest the leadership before Andy Burnham, the mayor of Greater Manchester, returns to parliament."

"The 10y Gilt yield dipped to 5.06% in early trading this morning, down 7.5bp from the intra-day high yesterday. The 30y gilt yield reached 5.814%, the highest since 1998. Pricing for the June MPC meeting hasn’t moved since the election last Thursday, 10bp is priced in for next month."

"Cable selling stalls before Health Sec Streeting meets PM Starmer this morning. Support 1.3482 (100dma) before 1.3420, resistance 1.3660."

"Today’s King’s Speech which sets out the legislative agenda of the government for the coming year is another test whether Starmer can project authority."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)