NBP: Governor Confirms Parties 'Couldn't Reach Agreement' On SAFE 0%

Beth Rigby at Sky News: "Spoken to Wes Streeting for Electoral Dysfunction podcast in past hour. Acknowledges atmosphere "febrile" but tells me "Keir Starmer doesn't need to resign". "It has not been the best week for the government". "Give Keir a chance"

• While a number of Cabinet Ministers have come out in support of the embattled PM, Health Secretary Wes Streeting's comments carry extra weight given that he is viewed as one of the potential candidates to succeed the PM should he resign.
• While not calling directly for Starmer's resignation, Streeting's comments do not appear as effusive in their support for the PM as some other Cabinet figures (see UK: Scottish Labour Ldr: PM Should Quit; But Senior Ministers Offer PM Support). Most have now come out publicly in support of the PM.
• Other frontrunners (former Deputy PM Angela Rayner, Energy and Climate Change Secretary Ed Miliband, Mayor of Greater Manchester Andy Burnham) have yet to comment. 

Gilts traded away from session lows after the Guardian reported that the Labour first minister in Wales insists “that she is not planning to say anything on Keir Starmer's leadership today - despite reports to the contrary”.

• This comes amid Scottish Labour leader, Anas Sarwar, calling for Starmer to step down, confirming earlier reporting.
• Some ministers (including Reeves, Streeting, Cooper, Lammy & Reed) came out in support of the PM around the time of Sarwar’s telegraphed comments, providing further support.
• Meanwhile, comments from Downing Street point to the general election result and Starmer winning a 5-Year mandate, despite ever-deepening questions surrounding his future.
• Gilt futures breached support at the November 19 low (89.86), basing at 89.76, before a recovery to 90.102 on the ministerial support.
• Next support levels of note come in the form of projection levels (89.73/52/06), with bears remaining in technical control. Meanwhile bulls need to retake the 20-day EMA (91.20).
• Cash yields 0.5-6.0bp higher on the day, 20s under the most pressure, while last week’s dovish BoE outcome helps tether the short end, factoring into curve steepening in the time since.
• 10+-Year yields on track for the highest close seen since pre-Budget times (mid-November), with 4.60% continuing to cap moves higher in 10s for now (Nov high 4.619%).
• 2s10s less than 1bp off the ’18 closing high (94.63bp).
• Medium-dated APF supply sees lowish cover, but politics dominates.

Almost 90% of the APF sales today were of the 1.75% Sep-37 gilt.