Lombard Odier advises investors to maintain overweight positions in emerging market credit and gold, citing the potential for a gradual easing of tensions in the Middle East.

"A further sharp escalation of conflict with Iran—which is difficult to consider a base case scenario given Trump's political incentive to avoid higher fuel prices for US voters—could force investors to reassess various risk assets, including those in emerging markets," said Singapore-based strategist Homin Lee in an interview.

However, investors should remain aware that a backlash from US voters ahead of the midterm elections could pose a risk of a significant new "TACO" rally, which should not be overlooked.

"We have reduced our overweight position in emerging market equities to hedge against the risk of an extremely adverse scenario."

Concerns over "prolonged disruptions" in energy markets would likely trigger a broad sell-off initially, after which investors might begin to consider assets that could benefit from a recession and investments in energy diversification, such as credit assets in Latin America.