Core Viewpoint - The British pound has strengthened against the US dollar, reaching a high of 1.3338, supported by improved UK services PMI data, while the dollar remains under pressure ahead of anticipated Fed rate cuts [1]. Economic Data - The UK services PMI was revised up from an initial value of 50.5 to 51.3, remaining above the expansion threshold of 50.0. The composite PMI also rose to 51.2 [1]. - Despite the improvement in data, S&P Global noted that the economic fundamentals remain weak, with a slowdown in business activity and the largest drop in employment since February. Additionally, output price inflation has decreased to its lowest level since January 2021 [1]. Central Bank Expectations - The market expects the Bank of England to cut rates by 25 basis points in December, with a consensus that the central bank will then enter a prolonged pause to mitigate the risk of inflation resurgence [1]. - Conversely, the dollar is under pressure as the market has fully priced in a third consecutive rate cut by the Fed in December, with expectations for at least two more cuts by 2026 [1]. Technical Analysis - On the H4 chart, GBP/USD is on a strong upward trajectory, approaching a key resistance level at 1.3354. The price remains above the middle Bollinger Band, indicating a bullish trend [3]. - A successful breakout above 1.3354 could initiate a new upward movement targeting the resistance range of 1.3363-1.3380. If a pullback occurs, the important support level is at 1.3280, with a potential deeper correction if this level is breached [3]. - The H1 chart shows that GBP/USD maintains an upward trend, currently in a correction phase but still above the local support at 1.3179, which is the starting point of the previous upward movement. The overall structure remains bullish, with a potential retest of 1.3350 if the price stays above the middle Bollinger Band [6]. Conclusion - The strength of GBP/USD is attributed to the clear divergence in central bank policy expectations, favoring the pound in the short term. The currency pair is testing the critical resistance level of 1.3354, with a successful breakout likely to accelerate the upward trend, while failure to break could lead to a pullback towards 1.3280. Upcoming meetings of the Fed and the Bank of England will be crucial in determining whether this momentum can be sustained [7].

Group 1 - Report industry investment rating: Not provided Group 2 - The report's core view: The short - term view of Treasury bond futures is mainly for shock consolidation. In the short term, the possibility of the policy interest rate remaining unchanged is high, and the upward momentum of Treasury bond futures in the first ten - day period is insufficient. However, economic data such as consumption and investment in October have weakened, and the future monetary policy environment is expected to be relatively loose. Currently, attention should be paid to the statements on monetary policy in the December key meeting and changes in the market's expectations of the central bank's interest rate cuts [5] Group 3 Variety view reference - Financial futures stock index sector - For the TL2512 variety, the short - term view is shock, the medium - term view is shock, the intraday view is weak, and the reference view is shock consolidation. The core logic is that the short - term expectation of interest rate cuts has decreased, while the long - term expectation of easing still exists [1] Main variety price market driving logic - Financial futures stock index sector - For varieties TL, T, TF, and TS, the intraday view is weak, the medium - term view is shock, the reference view is shock consolidation. The core logic is that Treasury bond futures oscillated and pulled back yesterday. In the short term, the policy interest rate is likely to remain unchanged, and the upward momentum of Treasury bond futures in the first ten - day period is insufficient. But the economic data in October has weakened, and the future monetary policy environment is expected to be loose to maintain the stability of macro - aggregate demand, so there is still support for Treasury bond futures. Currently, attention should be paid to the statements on monetary policy in the December key meeting and changes in the market's expectations of the central bank's interest rate cuts [5]

Group 1 - The market anticipates a 60% probability that the European Central Bank will cut interest rates by 25 basis points before December, compared to a 50% probability before the release of U.S. data [1]

Core Viewpoint - The market anticipates an 80% probability of the European Central Bank (ECB) lowering interest rates by March 2026, while the expectation for the U.S. data release stands at 65% [1] Group 1 - The expectation for the ECB's interest rate cut reflects a significant market sentiment towards easing monetary policy in Europe [1] - The U.S. market shows a slightly lower expectation for interest rate cuts, indicating a divergence in monetary policy outlooks between the two regions [1]

Group 1 - Deutsche Bank and Royal Bank of Canada have lowered their expectations for the European Central Bank's final interest rate cut [1]

Group 1 - The core viewpoint is that the Canadian employment data has influenced the swap market's expectations regarding the likelihood of a rate cut by the Bank of Canada this month, decreasing from 27% to 18% [1]

Core Viewpoint - Traders are no longer fully absorbing the expectations of another interest rate cut by the European Central Bank this year [1] Group 1 - The market sentiment regarding the European Central Bank's potential interest rate cuts has shifted, indicating a more cautious approach among traders [1]

Core Viewpoint - The Bank of Israel has decided to maintain the benchmark interest rate at 4.5% for the 11th consecutive time, reflecting a cautious stance amid escalating military actions in Gaza and rising inflation [1] Summary by Relevant Sections Interest Rate Decision - The decision to keep the interest rate unchanged aligns with the expectations of all 12 analysts surveyed [1] - This marks the 11th consecutive meeting where the rate has been held steady [1] Inflation Context - The annual inflation rate has deviated further from the central bank's target range of 1%-3% [1] - April's inflation rate reached its highest level in eight months, increasing from 3.3% in March to 3.6% [1] - The rise in inflation has been attributed to a sales tax increase earlier in the year [1] Future Outlook - Bank of Israel Governor Amir Yaron indicated that if inflation slows and market risk premiums remain manageable, the central bank may consider lowering interest rates in the second half of the year [1]

Core Viewpoint - The market anticipates that the Bank of England will implement a cumulative interest rate cut of approximately 35 basis points by the end of 2025, a slight decrease from the previous expectation of 36 basis points prior to the release of UK inflation data [1] Summary by Relevant Categories - **Interest Rate Expectations** - Market forecasts a cumulative interest rate cut of about 35 basis points by the end of 2025 [1] - Prior to the inflation data release, the expectation was around 36 basis points [1] - **Inflation Data Impact** - The release of UK inflation data has influenced market expectations regarding interest rate cuts [1]

Group 1 - The GBP/USD exchange rate stabilized above 1.3300, with the latest rate at 1.3308, reflecting a slight increase of 0.01% as the market digests the recent economic data [1] - The UK economy grew by 0.7% in Q1, significantly surpassing the expected 0.6% and the previous quarter's growth of 0.1%, indicating stronger economic performance [1] - The market's expectations for a rate cut by the Bank of England have decreased, with projections for a cut in 2025 dropping from 70 basis points to 44 basis points following the recent economic data [1] Group 2 - Hawkish comments from Bank of England officials have influenced market expectations, with a key speech from committee member Swati Dhingra anticipated [2] - The GBP/USD exchange rate remains trapped in a narrow range around 1.3300, with buying pressure preventing a drop below the 50-day EMA at approximately 1.3110 [2] - UK Chancellor Rachel Reeves emphasized the significance of trade agreements with the US and India despite facing economic headwinds [1]