Ongoing exchanges of fire between Israeli forces and Hezbollah, including a major Israeli bombardment in early October that killed over 300 people in Lebanon, continue to shape trader views on the likelihood of further military action. Israeli Prime Minister Netanyahu has stated there is no ceasefire with the group and has directed the start of direct talks with Lebanese officials, to be hosted by the US, focused on Hezbollah disarmament and security arrangements in the south. Israel maintains control over a border security zone and has conducted targeted strikes and ground operations in response to rocket and drone attacks, while Lebanese authorities report rising casualties since March. Upcoming negotiations and any shifts in Hezbollah activity or US diplomatic pressure remain key variables that could influence escalation risks in the near term.