- Global markets are currently leaning toward de-escalation trades with investors favoring the euro and Australian dollar over the US dollar despite the collapse of weekend negotiations in Islamabad.
- Brent crude oil prices surged approximately 7.5 percent to over 102 dollars per barrel following the breakdown of talks and subsequent US threats of a maritime blockade in the Strait of Hormuz.
- The euro fell roughly 0.5 percent to 1.1672 against the dollar in early trading as safe-haven flows briefly boosted the greenback before markets stabilized near the 1.1700 level.
- Bank of America analysts remain cautious on the US dollar but highlight continued upside potential for the EURJPY pair and broader risk assets if geopolitical tensions do not re-escalate further.
- The International Monetary Fund and World Bank are preparing to downgrade global growth forecasts this week as energy price volatility from the Middle East conflict impacts emerging markets.
Bank of America notes market positioning for de-escalation despite failed Islamabad peace talks
Apr 13, 2026, 2:30:11 PM UTC(1 day ago)
Impact: MediumAffected Assets
Sources
From:@DeItaone
BOFA: MARKETS PRICED FOR DE-ESCALATION TRADE
Bank of America says markets are positioned for de-escalation trades, with weaker USD and strength in EUR, AUD, and emerging markets.
Signals from flows and positioning suggest investors are leaning toward easing geopolitical tensions, despite ongoing uncertainty after failed talks in Islamabad.
The bank remains cautious on the dollar but sees continued upside in EURJPY and broader risk assets unless conflict re-escalates.
