South Africa’s 10-year bond yield eased slightly to below 8.50%, as traders continued to weigh the chances of a US-Iran peace deal despite conflicting news on the status of negotiations. Oil prices pulled back after President Trump said negotiations with Iran were still ongoing, following reports that Iran had exited talks, while also signaling that a trade deal could be possible as early as next week. Lower oil prices helped ease inflation concerns and supported gold prices, which in turn strengthened the rand. A firmer currency can help reduce imported inflation over time, particularly for dollar-priced goods such as fuel, making South African government bonds more attractive to investors. Meanwhile, SARB’s Governor Lesetja Kganyago reiterated the central bank’s commitment to bring inflation back to its 3% target. The central bank raised borrowing costs by 25 basis points to 7% on May 28 amid rising inflationary pressures, while signaling that further tightening may be needed.

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