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[MARKET ANALYSIS] Gilts in focus at the open following Burnham's strong by-election win

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German PPI YoY (May) Y/Y 2.2% (Prev. 1.7%)

UK Public Sector Net Borrowing Ex Banks (May) 23.3B (Prev. 24.3B)

[MARKET ANALYSIS] Gilts in focus at the open following Burnham's strong by-election win

Newsquawk Daily European Equity Opening News - 19th June 2026

Sky's Rigby says UK PM Starmer's position has changed, he intends to fight any leadership challenge

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  • External leads are negative, with USTs lower by a handful of ticks and Bunds by around 40. Note, overnight action was limited on account of numerous holidays in Asia and as the US is away today.
  • For the UK, we are likely set for a bearish open as we price in the very high chance of Burnham becoming PM after his strong victory in the Makerfield by-election. As a reminder, Pantheon outlined that a Burnham premiership could add 7-14bps of additional premia to the UK 10yr yield.
  • Today, Burnham is expected to speak at 10:00BST. However, reporting prior to the by-election result suggested he would not spark anything today. Instead, he is expected to speak with PM Starmer next week and persuade him towards an orderly transition. An outcome Starmer may struggle to argue and operate against, given the strength of Burnham’s by-election victory.
  • Technically, Gilts look to a near double-bottom at 89.04 before levels just above 88.50 and then the figure itself with numerous recent lows below that. For the 10yr yield, which ended yesterday around 4.76%, we firstly have a recent high at 4.80%. The potential additional premia could take us back towards the 4.95% MTD peak. Thereafter, we would look to 5.19%, the May and YTD peak for the 10yr.
  • Note, recent reporting via the FT suggests that Burnham is being advised by former OBR head Hughes. An addition to the Burnham team, which, alongside some of the other touted additions such as Jim O’Neill and Andy Haldane, may offset some of the Gilt market's concern around Burnham’s touted and outlined policy ambitions.

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