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Globally, the negotiations between the US and Iran towards a lasting agreement began in Switzerland over the weekend, while locally the CPI for May undershot expectations.

Geopolitical developments surrounding the Iran conflict dominated markets last week, culminating in an interim agreement between the US and Iran to end hostilities and reopen the Strait of Hormuz. The deal, which includes a 60-day ceasefire and immediate reopening of the critical waterway, has significantly eased supply concerns after months of disruption. While key issues such as sanctions relief and Iran’s nuclear program remain for future negotiations, the breakthrough triggered a sharp drop in oil prices and reduced inflation fears globally. Markets are now assessing the implications for energy costs, second-round effects, and central bank policy paths as the conflict winds down.

Last week, US non-farm payrolls (NFP) surprised to the upside in May rising by 172k versus expectations of 88k. Locally, SARB Governor Lesetja Kganyago reaffirmed that the central bank remains firmly committed to returning inflation to its 3% target, despite mounting inflationary pressures arising from the ongoing Iran conflict.

Globally, negotiations between the US and Iran continue without a deal being reached, while locally, the SARB’s MPC hiked the policy rate by 25 bps.

The South African Reserve Bank (SARB) delivered a widely expected 25 basis point(bps) hike at its May Monetary Policy Committee (MPC) meeting, lifting the repo rate to 7.00% from 6.75%. The decision was taken in a 4–2 split vote, marking the first rate increase since May 2023 and effectively ends the easing cycle that began in September 2024.

Geopolitical developments surrounding the Iran conflict remained in focus last week, with both the US and Iran signalling meaningful progress toward a framework agreement to end hostilities. Negotiations mediated in Doha have centred on reopening the Strait of Hormuz within roughly 30 days of a formal deal, easing sanctions, and addressing frozen funds, though key details remain thin and US strikes on Iranian vessels have added tension. Markets are closely watching oil price dynamics, potential second-round inflation effects, and central bank responses amid fragile peace talks and persistent global supply risks. Locally, the SARB is expected to hike the repo rate by 25 bps this week.

Last week, the US Senate confirmed Kevin Warsh as Chair of the Federal Reserve in a narrow 54–45 vote, the tightest confirmation margin for a Fed chair on record. Locally, the South African Reserve Bank (SARB) announced the appointment of Dr Konstantin Makrelov as the sixth member of its Monetary Policy Committee (MPC).