Last week, the spotlight was on US inflation as it surged beyond expectations to 3.5%, propelling yields to recent highs. Despite the economy's robust performance, traders now anticipate only two rate cuts this year, with the first delayed until September.

In the UK, speculation persists regarding the timing and extent of Bank of England rate adjustments. Economists have revised down forecasts to anticipate a total of 0.50% in cuts for the year, with further easing expected through 2025. Tuesday promises a flurry of UK PMI releases, potentially amplifying pressure on the Pound.

As anticipated, the European Central Bank maintained its monetary policy stance this week. Analysts predict a more aggressive approach to rate cuts compared to their counterparts, with an initial cut priced in for June and a projected cumulative reduction of around 0.75% this year.

Market momentum continues to hinge on interest rate differentials and escalating geopolitical tensions, which significantly influence investor sentiment.

On the currency front, GBP/USD has dipped to year-to-date lows near the critical 1.2400 mark as markets reassess expectations for US rate cuts. Meanwhile, GBP/EUR remains confined within a narrow range near 1.1650.