No deadline has been set for the Lebanese Armed Forces to demilitarise the designated zones, reports Jerusalem Post citing sources

• However, any further implementation of the pilot zones is contingent on the successful execution of the initial pilot program.
• The official also says that talks between Israel and Lebanon on the normalisation of relations and the demilitarisation of Hezbollah are expected to resume at the beginning of August.

The absence of a set deadline for demilitarisation in designated zones indicates ongoing tension and uncertainty in Israel-Lebanon relations. This could impact asset classes sensitive to geopolitical tensions, such as the USD and energy markets, especially if talks on normalisation and Hezbollah's status fail or stall. Traders should be aware of potential volatility as developments unfold, particularly with resumed negotiations on the horizon.