South Africa’s 10-year government bond yield fell toward 8.3%, reaching its lowest level since April 17, as a sharp decline in oil prices improved the inflation outlook and reduced expectations of further monetary tightening. The move followed reports of a preliminary peace agreement between the US and Iran, which includes the lifting of the US blockade and the reopening of the Strait of Hormuz. The agreement is expected to be formally signed in Switzerland on Friday. Nevertheless, investors remain cautious as markets await additional details and the future of Iran’s nuclear program remains unresolved. In its latest Financial Stability Review, the South African Reserve Bank indicated that a prolonged conflict in the Middle East could have warranted another rate hike later this year. The central bank raised its benchmark interest rate by 25 basis points to 7% on May 28, its first increase in three years. Looking ahead, investors are focused on May's inflation report due on Wednesday.