Israel continues military operations in southern Lebanon despite ceasefire

Israel’s military operations in southern Lebanon continue unabated, with the region experiencing persistent airstrikes and demolition activities. Despite a US-brokered ceasefire that was meant to stabilize the area since April 2026, Israel has maintained its security zone, resulting in significant casualties and displacement. Reports indicate over 4,300 deaths since March, illustrating the ongoing intensity of the conflict. The actions appear to undermine the ceasefire agreement, with no sign of de-escalation. Key Takeaways Market pricing suggests a decreased likelihood of Israeli forces withdrawing from beyond the Litani River by the December 31 deadline, as ongoing strikes reflect a lack of progress towards a ceasefire. The probability of withdrawal by August 31 remains extremely low, with market odds at just 0.1% YES, indicating minimal expectation of change within this time frame. Markets appear to view continued military operations as consistent with scenarios where the ceasefire does not result in withdrawal, affecting pricing in related markets. What to Watch The situation remains fluid, with key indicators including any announcements from Israeli Prime Minister Benjamin Net...