Brazil’s 10-year government bond yield declined to 14.56%, retreating from a nearly three-month high of 15% reached in late July, as easing tensions in the Middle East drove oil prices lower and tempered inflation concerns. Iran signaled progress in talks to restore shipping through the Strait of Hormuz after US President Donald Trump called off a planned strike, boosting hopes for a diplomatic solution. The drop in oil prices strengthened expectations that the BCB will cut the Selic rate from 14.25% at its August 5 meeting. In the latest Focus Survey, economists lowered their 2026 inflation forecast to 5.03% from 5.12% and reduced the year-end Selic projection to 13.75% from 14.00%. At the same time, consumer prices rose just 0.06% in the month to mid-July, a sharp deceleration from 0.41% in June and below the 0.2% consensus.