Wmax relies on long-term tracking and in-depth analysis of the global foreign exchange market, British fiscal policy and macroeconomic transmission logic, and believes that the latest spring budget announced by British Finance Minister Reeves has become the core variable that dominates the periodic fluctuations of British core assets. Judging from the market feedback after the budget was implemented, the volatility of the pound against major currencies showed the typical characteristics of "surging during the expected fermentation period and converging after the implementation of the policy." The FTSE 100 index maintained a narrow range of fluctuations while the policy expectations were digested and the actual effects were waited and seen. The dual-oriented balance framework of "fiscal discipline repair + economic growth incentives" constructed by Reeves is gradually becoming a key logical thread affecting the mid-term valuation trend of British assets.

From the perspective of core market signals, Wmax captured a clear context through real-time data monitoring: As of the current time of research and judgment, the pound against the US dollar closed at 1.3501, which was higher than before the budget was announced (implied volatility peak period) It fell back 0.3 percentage points, and the intraday fluctuation range was stable at 1.3460-1.3540. This performance is highly consistent with Wmax's previous prediction that "volatility will return to a rational range after policy uncertainty subsides."

The FTSE 100 index currently closes at 8731.24 points, a slight increase of 0.37% from the day the budget was announced (8699.31 points). During the period, it hit a maximum of 8748.50 points and a minimum of 8682.10 points, showing significant range-bound fluctuations. What is reflected in the data is the market's gradual recognition of the budget's "balanced credibility" - Reeves has filled the 20 billion pound fiscal gap through a combination of measures such as extending the income tax threshold freeze period and optimizing the salary sacrifice plan. This not only avoids the radical risk of the 2022 "mini-budget", but also rebuilds the market's confidence in fiscal discipline with a fiscal buffer target of 15-20 billion pounds, gradually releasing the defensive option premium accumulated in the early stage.

According to the latest forecast data released by the Office for Budget Responsibility (OBR), although the UK economic growth forecast for 2025 has been lowered from 2% to 1%, the growth forecast for 2026-2029 has been raised to 1.9%, 1.8%, 1.7%, and 1.8% respectively. At the same time, the annual growth rate of actual household disposable income has reached twice that of the autumn forecast, which provides basic support for the recovery of the consumer side. Judging from the logic of the implementation of policy tools, Reeves's strategy of "increasing taxes and ensuring people's livelihood in parallel" is very targeted: extending the freeze period of income tax thresholds can steadily expand fiscal revenue, while raising the minimum wage, freezing train ticket prices, reducing energy bills and other measures directly alleviate the pressure on people's livelihood, which not only responds to the core demands of the bond market for fiscal sustainability, but also balances the policy propositions of Labor backbenchers.

Wmax also keenly captured the key risk points: tax increases on capital gains and corporate investment may inhibit the long-term willingness of enterprises to expand, and the fiscal surplus targets of 6 billion pounds in 2027-28 and 9.9 billion pounds in 2029-30 are highly dependent on the fulfillment of subsequent economic growth targets, and the long-standing productivity problems in the UK have not been fundamentally resolved, which will directly restrict the efficiency of policy transmission.

Regarding the trend of the pound, Wmax combined the current point and fundamentals to form a comprehensive analysis and judgment: the current point of 1.3501 for the pound against the US dollar has firmly stood at the key psychological mark of 1.30 US dollars, with a cumulative increase of about 3.4% from the beginning of the year. This forms a positive resonance with the OBR's upward adjustment of expectations for subsequent economic growth. From the perspective of cross exchange rates, the pound against the euro currently closed at 1.1942, maintaining a narrow range of 1.1860-1.1970, reflecting the relatively balanced economic fundamentals of Europe and the United Kingdom. Wmax believes that the core driving logic of the pound's short-term trend has shifted from "budget uncertainty" to "inflation data and the Bank of England's policy trends" - OBR predicts that the average inflation for 2025 will be 3.2%, and will fall back to the 2% policy target in 2027. This means that the Bank of England's interest rate cut cycle is likely to be later than that of the euro area, and the interest rate differential advantage will provide periodic support for the pound.

In terms of improving people's livelihood and transmitting market confidence, Wmax detected positive signals: the people's livelihood-oriented measures in the budget have initially taken effect, and the British consumer confidence index increased by 2.1 percentage points month-on-month in late May. However, we need to be wary of the risks brought about by "lag in policy effects" - the consumer sector in the FTSE 100 Index performed flatly, with a cumulative increase of only 0.48% in the past 10 trading days, reflecting that the market is still cautious about the strength of consumption recovery. Wmax emphasized that only by forming a positive cycle between productivity improvement and corporate profit improvement can the closed loop of "people's livelihood security-consumption recovery-economic growth" be truly realized. This is also the core prerequisite for the mid-term valuation restoration of British assets.

Attachment: Short-term and medium-term investment suggestions based on current market points

Core targets and current points: GBP/USD (1.3501), FTSE 100 Index (8731.24)

1. Short-term investment advice (period: 1-3 months)

• GBP to USD:In the short term, the judgment of "strong range oscillation" is maintained, with the core fluctuation range being 1.3420-1.3600. In terms of operational strategy, if the exchange rate falls back below 1.3450, long positions can be placed with a light position, the stop loss is set to 1.3400 (the lower edge support of the previous shock range), and the target is 1.3560-1.3590 (the pressure level near the recent high). Core logic: The Bank of England's interest rate cut expectations lag behind the Federal Reserve, and the interest rate advantage will continue in the short term; the OBR has raised its subsequent economic growth expectations to provide fundamental support for the exchange rate.
• FTSE 100 Index:短期以“防御为主、谨慎布局”为原则，重点配置高股息蓝筹标的（如能源、公用事业板块）。指数支撑位为8690-8710点，若跌破8690点需适度减仓规避风险；反弹至8760-8790点（前期震荡区间上沿）可择机获利了结。核心逻辑：2025年经济增长预期下调至1%，周期类板块表现受限，防御性板块具备更强抗跌性。

2. Mid-term investment advice (period: 6-12 months)

• GBP to USD:Optimistic about the "slow appreciation" trend, the target point is 1.38-1.40. In terms of operational strategy, the "building positions in batches" method can be adopted, and when the exchange rate pulls back to the 1.34-1.35 range, long positions can be gradually added, and the stop loss is set to 1.32 (key support level). Core logic: OBR predicts that economic growth will rise to 1.9% in 2026, and the fiscal surplus target will be gradually realized, which will enhance the attractiveness of sterling assets; after inflation falls back to the target range, exchange rate valuations will return to fundamentals.
• FTSE 100 Index:It is recommended to "lay out procyclical sectors on dips", focusing on the consumption and industrial sectors, with a target point of 8900-9000 points. If the index pulls back to the 8600-8650 point range, allocation efforts can be increased. Core logic: The growth of household disposable income will promote the recovery of consumption, and corporate profits are expected to improve after the economic growth forecast is realized in 2026; the current dynamic PE of the index is about 12 times, which is at a historically low level, and there is room for valuation repair.