South Africa’s 10-year government bond yield inched up to 8.50%, the highest leve since June 23rd, tracking most global peers, amid rising hostilities in the Middle East. Oil prices climbed above pre-war levels, following a new exchange of attacks between the US and Iran, which fueled concerns over inflation and potential rate hikes by major central banks. On the domestic front, the latest developments pose new risks to the inflation outlook. South Africa Reserve Bank Governor Lesetja Kganyago has repeatedly reiterated the central bank's commitment to bringing inflation back to its 3% target, while signaling further tightening may be needed. Inflation accelerated to 4.5% in May from 4% the prior month, largely due to higher fuel prices caused by Middle East disruptions.