• US PPI and CPI reports will dictate Federal Reserve monetary policy and interest rate expectations.
• Strong US jobs data has traders pricing in a sixty percent chance of a rate hike.
• The UK residential survey hit a five-month high, showing stabilizing trends despite a fragile recovery.

GBP/USD extends its winning streak for the fifth consecutive day, trading around 1.3540 during the Asian hours on Thursday.

Market participants are closely watching the upcoming US Producer Price Index (PPI) data due on Thursday and Consumer Price Index (CPI) data on Friday, as these inflation reports could provide vital hints regarding the Federal Reserve’s monetary policy outlook ahead of its meeting next week.

Triggered by recent stronger US jobs data, traders have increased their bets on an interest rate hike, with the CME FedWatch Tool pricing in about 60% odds for a rate increase at the central bank’s upcoming policy meeting.

Meanwhile, international housing data showed that the RICS UK Residential Market Survey house price balance improved to -28% in August 2026 from an upwardly revised -29% in July, hitting a five-month high as the market displays initial signs of stabilizing.

According to RICS, key activity indicators have become progressively less negative, though any recovery remains fragile, with property prices still projected to decline over the next three months before stabilizing on a 12-month horizon.

BoE tightening expectations firm as markets price in incremental hikes

Strategists at Scotiabank observe that, despite the recent firming in the Pound, the short end of the UK curve remains cautious on the near-term policy outlook. They note that the “short-term rates market is still pricing very little chance of a policy adjustment at next Thursday’s meeting,” but is nonetheless embedding a gradual tightening path, with “about 17bpts of tightening for November 5th and a cumulative 32bpts by December 17th.” This profile, they suggest, underscores how investors are leaning toward incremental BoE moves into year-end rather than an imminent shift in policy.