GBP has found some relief after a coordinated show of support for PM Keir Starmer from senior cabinet members, easing near-term leadership speculation. Chancellor Rachel Reeves, Home Secretary Shabana Mahmood, Foreign Secretary Yvette Cooper, Defence Secretary John Healey, Deputy Prime Minister David Lammy, Environment Secretary Steve Reed, and Chief Secretary to the Treasury Darren Jones all publicly backed Starmer, with Health Secretary Wes Streeting joining in. The display of cabinet unity has trimmed the political risk premium on UK assets, providing the GBP with support.
Yields and the USD took a leg lower after National Economic Council Director Kevin Hassett signalled that January jobs numbers may come in slightly weaker, though not to a level that should spark panic. Markets are bracing for a weak payrolls report on Wednesday, following signs of cracks in private-sector data: Revelio Labs posted a negative print for January, ADP missed expectations, and Challenger, Gray & Christmas reported a surge in layoffs.
*Daily move - against G10 rates as of 17:00 GMT, 09.02.26
** Indicative rates - interbank rates as of 17:00 GMT, 09.02.26
Markets are focused squarely on USD risk, ahead of Wednesday’s payrolls, with ADP weekly payrolls in focus today. Retail sales data for December is also due, with consensus expecting modest gains (MoM 0.4%, YoY 0.5%). Weak consumer spending could reinforce the narrative of slowing US growth.
In the UK, cabinet unity is easing political risk, giving GBP some near-term relief, but focus remains on political headlines as well as GDP numbers later this week.
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