Ceasefire Halts Conflict, Reassures Investors
Global markets surged on Tuesday following the announcement of a ceasefire between Israel and Iran, signalling a temporary halt to a conflict that had stoked fears of a broader Middle East war. Brokered through Qatari mediation and confirmed by U.S. President Donald Trump, the agreement laid out a phased cessation of hostilities, with Iran halting military operations at midnight ET on June 24 and Israel following suit 12 hours later. The ceasefire is set to be officially declared at midnight ET on June 25.

President Trump hailed the development as a “complete and total ceasefire,” crediting the leadership of both nations for ending the so-called “12-Day War.” Investors responded swiftly to the news: the USD weakened, the USD-ZAR pair dropped below 17.80, and oil prices plunged below $70 per barrel.

ZAR Gains on Risk Sentiment Surge

Global oil markets spiked on Monday as fears mounted over potential supply disruptions. Iran’s parliament has approved a measure to close the Strait of Hormuz, through which 20% of the world’s oil transits, though the final decision rests with its Supreme National Security Council. While some analysts, including Goldman Sachs, warn Brent could climb to $110 if the strait’s flows are halved, they anticipate limited lasting disruption due to the high geopolitical stakes.

ZAR Holds Steady as Investors Weigh Risks

In currency markets, the ZAR showed renewed strength amid rising global risk appetite. After testing 18.15/USD earlier in the week, the local unit rebounded to around 17.7750 at the time of writing. According to ETM Analytics, the ZAR’s appreciation is being supported by favourable terms of trade, as gold prices remain resilient while oil prices fall.

Indicators such as the ZAR Sentiment Index and the Carry Attractiveness Index suggest more upside potential. A stronger ZAR could provide much-needed relief to South Africa’s economy, especially as pressure on interest rates diminishes.

Treasury Taps Global Finance at Preferential Rates

Domestically, the South African Treasury is tapping into concessional financing sources to meet its R130 billion ($7.2 billion) borrowing requirement over the next three years. Active negotiations are underway with institutions including the French Development Bank and the New Development Bank, building on a recent $1.5 billion World Bank loan.

The funds will be directed toward structural reforms in energy, freight logistics, and the low-carbon transition. A future $25 billion credit guarantee vehicle is also in development with the World Bank to unlock infrastructure investment.

Commodities Retreat as War Premium Fades

Oil and gold prices fell sharply as geopolitical tensions eased. Brent crude tumbled nearly 4% to $68.79/bbl, while WTI dropped 3.94% to $65.46/bbl. Analysts cited the removal of the Middle East risk premium and potential increases in Iranian oil exports. Meanwhile, spot gold declined 0.5% to $3,351.47/oz as safe-haven demand diminished.

Base metals showed more stability, with copper prices inching up on both the LME and SHFE. Aluminium, which recently hit a three-month high, saw a pullback amid easing energy concerns.

Fed Dovish Pivot Gathers Steam

U.S. Federal Reserve officials signalled a shift toward a more accommodative stance. Fed Vice Chair Michelle Bowman, speaking in Prague, suggested rate cuts could begin as soon as July, citing risks to the labour market and contained inflation. The 10-year U.S. Treasury yield dropped to 4.35%, further reflecting market expectations of easing.

All eyes now turn to Fed Chair Jerome Powell’s congressional testimony and upcoming U.S. inflation data to confirm the timing and extent of potential policy moves.

South African Data in Focus

Locally, the SARB’s composite leading indicator for April is due today, with analysts anticipating signs of strain from recent U.S. tariff actions and domestic political uncertainty. March’s reading had shown improvement, but April could reflect a turning point as business sentiment begins to waver.