As President-elect Trump prepares to enter the White House. Israel might be preparing a welcome gift for him and an incidental farewell gift for President Biden. This will come in the form of a ceasefire deal for the ongoing conflict between Israel and Hezbollah.
This deal might also have the support of Iran, which would be willing to take steps to reduce pressure from the coming US president. If this does not fall through as the deal with Hamas is due, it will be a big welcome step from a geopolitical perspective.
It might also result in some chance of de-escalation between Israel and Iran and give scope for negotiations before it gets out of hand for both countries and the world.
Even the financial markets would interpret the news as a big step in easing geopolitical tensions leading to reduced oil and commodity prices. It might also result in lower global bond yields and dollar index reduction. And the net impact would be another positive for global stock markets as regional risk is reduced.
The question will remain whether the execution of the deal occurs without any issues. And though the near-term risk might shift out doubt in the medium would remain as President-elect and Israel's PM agree on Iran not achieving nuclear targets.
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