JOHANNESBURG, May 6 (Reuters) - South African stocks, government bonds and the rand currency strengthened in early trade on Wednesday after U.S. President Donald Trump signalled a possible peace deal with Iran, lifting global risk appetite and boosting demand for emerging market assets.
o At 0802 GMT the rand traded at 16.43 against the dollar, up about 1.5% from Tuesday's close.
o Trump said that "great progress" had been made towards a comprehensive agreement with Iran and said he would pause an operation to escort ships through the Strait of Hormuz.
o The U.S. dollar was last down about 0.3% against a basket of currencies, with oil prices also falling to trade below $110 a barrel on expectations that bottled-up supply from the Middle East could resume.
o South Africa is a net importer of petroleum products and heavily exposed to fluctuations in global energy prices.
o "The risk at the moment is asymmetric, and the rand is vulnerable to further adverse developments that could hurt the country's terms of trade and tilt cross-border flows against the currency," ETM Analytics said in a research note.
o A business survey showed on Wednesday that South Africa's private sector expanded at its fastest in nearly four years in April.
o On the Johannesburg Stock Exchange, the Top-40 index was up 2.5%.
o South Africa's benchmark 2035 government bond also firmed in early deals, with the yield down 14 basis points at 8.71%.
(Reporting by Sfundo Parakozov and Nilutpal TimsinaEditing by David Goodman)
