Lebanon ceasefire holds as longest lull in three months tests market risk appetite

The ceasefire between Israel and Hezbollah has largely held in Lebanon, marking the longest period of calm in three months of conflict.

Despite the lull, widespread fear of renewed hostilities continues to prevent displaced populations from returning to their homes, underscoring the fragility of the truce.

This development follows recent diplomatic reports indicating that Israel and Lebanon have reached a full ceasefire agreement, contingent on specific steps taken by Hezbollah.

The agreement comes after sustained efforts by the United States to de-escalate tensions in the region.

While the immediate violence has subsided, the conditional nature of the deal means that the risk of a breakdown remains elevated.

For markets, the persistence of the ceasefire offers a temporary reprieve from the geopolitical premium that has weighed on regional assets and energy prices.