The risk of a worst-case escalation in the Iran conflict is easing, setting the stage for a rally in both stocks and bonds, according to Citadel Securities.

While tensions in the Middle East remain elevated, President Donald Trump has signaled that he is “keen to bring an end to this war” after agreeing to a two-week ceasefire on April 7, Nohshad Shah, head of EMEA fixed-income sales at Citadel, wrote in a client note.