Summary
- BofA said global financial markets are reflecting the possibility of easing geopolitical tensions, supporting broader risk appetite.
- BofA said positioning for easing tensions is evident as the dollar weakens and the euro (EUR), Australian dollar (AUD) and emerging-market assets strengthen.
- BofA said it remains cautious on the dollar while citing further upside for EUR/JPY and broader risk assets, though the trend could reverse if the conflict escalates again.
Forecast Trend Report by Period
Global financial markets are pricing in the possibility of easing geopolitical tensions, with currencies and asset flows signaling stronger demand for risk assets.
Bank of America said on June 13 that markets have recently been positioned for a "de-escalation" scenario.
The dollar has weakened, while the euro, Australian dollar and emerging-market assets have strengthened. Fund flows and investor positioning also point to expectations that tensions will ease.
Still, uncertainty remains after the breakdown of the Islamabad talks. Geopolitical risks have not been fully resolved.
BofA said it remains cautious on the dollar while seeing room for further gains in EUR/JPY and risk assets more broadly. The bank added that the trend could reverse if the conflict escalates again.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
