Key events

14m agoPound near 2026 low as PM Keir Starmer expected to announce resignation timetable
1h agoBrent crude prices at lowest level since March
2h agoIntroduction: Oil prices fall, stocks rise on reports of 'progress' in Iran-US peace talks

Pound near 2026 low as PM Keir Starmer expected to announce resignation timetable

Sterling declines, hovering close to its yearly low, while investors anticipate details on Prime Minister Keir Starmer's resignation schedule.

The pound slips around 0.35 percent to 1.3191, as attention focuses on market responses to the anticipated leadership transition toward Andy Burnham.

Eurozone bond yields ease modestly, partly due to brief relief from US-Iran peace talk advances, amid expectations this could reduce geopolitical strains and conflict-driven inflation that might otherwise prompt additional ECB rate hikes.

The yield on Germany's benchmark 10-year bond falls 2 basis points to 2.966 percent this morning. (This follows a 6 basis point rise on Friday after peace talks were suddenly halted)

It coincides with ECB president Christine Lagarde scheduled to address the European parliament's committee on economic and monetary affairs in Brussels this afternoon, beginning at 2pm BST.

Her remarks follow the ECB becoming the first major central bank to increase interest rates since the Iran conflict began earlier this month.

Although financial markets anticipated two further ECB rate increases by next March, the weekend's peace discussions have moderated those projections.

Brent crude prices at lowest level since March

Oil prices trade at their lowest point since March, though analysts caution it may be premature to expect a lasting decline in energy costs despite advances in US-Iran peace talks this weekend.

Stephen Innes, an analyst with SPI Asset Management, notes the need to avoid overstating Monday's oil movement:

Brent shorts had built meaningfully last week, so part of the early upside looks like traders taking risk down rather than launching into a full-blown conflict trade.

When positioning has leaned too far into calm, it does not take much tension to force a little oxygen back into the price. That is less a declaration of war than a reminder that carrying shorts into a geopolitical negotiation is rarely a comfortable overnight position.

Patrick Wintour and Jonathan Yerushalmy Iran's foreign minister has reported "progress" after the initial day of discussions between senior officials from Washington and Tehran concluded in Switzerland, despite a tense start involving Donald Trump warnings of renewed attacks.

A joint statement from mediators Qatar and Pakistan indicated the US and Iran settled on a roadmap toward a final agreement within 60 days. Technical discussions between junior officials will proceed for the remainder of the week, per the statement, with conflict between Israel and Iran-backed Hezbollah in Lebanon high on the agenda.

"Pakistani and Qatari mediation has delivered major progress to end Lebanon war," said Abbas Araghchi, the Iranian foreign minister, after talks concluded just after 3am local time (1am GMT).

The joint statement noted the US and Iran consented to create a "communication line" to prevent incidents in the strait of Hormuz, and to form a "deconfliction cell" with Lebanon's government to secure "adherence of the termination of military operations in Lebanon".

In a key step to enable further advances, the US Treasury prepared to issue a 60-day waiver removing sanctions on oil, petrochemicals and derivatives. Iran indicated this would allow its central bank to sell oil to buyers, mainly China, and receive payments free from sanction risks.

Qatar and Iran also signed a memorandum regarding the release of Iranian assets frozen in Qatar bank accounts owing to US secondary sanctions. It remained unclear if the US had imposed any limits on Iran's deployment of the assets, such as requiring the funds be used solely for humanitarian items.

The economic steps may alleviate some strain in Iran's exchange markets and gradually ease runaway inflation, the nation's primary domestic issue currently.

European stocks begin the week on an upbeat note, following reports of headway in US-Iran peace talks.

Here is how they appear at the opening of trading:

FTSE 100 is up 0.11%
France's CAC 40 is up 0.15%
Spain's IBEX is up 0.08%
Germany's Dax is up 0.22%
Pan-European Stoxx 600 is up 0.11%

Introduction: Oil prices fall, stocks rise on reports of 'progress' in Iran-US peace talks

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Investors place hopes on reports of advances in the US-Iran peace talks, helping ease market concerns that have pressured stocks and driven energy prices higher.

A first round of discussions between US and Iranian officials in Switzerland this weekend reportedly concluded positively, with the Iranian foreign ministry noting solid progress, according to Iran's Press TV.

Officials from Qatar and Pakistan, serving as mediators, also stated the US and Iran had established a roadmap that would finalize a deal within 60 days.

While that may seem distant, it has sufficed to steady oil markets, pushing Brent crude prices down more than 2 percent and below $80 a barrel, at $78.90, a notable decline from its May high of $126.41.

The news has also boosted stock prices in Asia. Japan's Nikkei advanced 1.8 percent this morning, while South Korea's Kospi rose 0.6 percent and the MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.8 percent. Chinese blue chip stocks increased 1.6 percent.

Ipek Ozkardeskaya, a senior analyst at Swissquote, describes it as some relief after a weekend of uncertainty:

The week starts on a surprisingly positive note despite the uncertainty surrounding the US/Iran peace talks, which took several twists over the weekend.

On Friday, the talks were postponed (likely due to Israel's renewed attack on Lebanon).

On Saturday, Iran announced that it would close the strait of Hormuz again.

Yet senior US and Iranian officials still met at Switzerland's Burgenstock resort on Sunday, to kick off the 60-day negotiation period.

They said the talks went well. Meanwhile, US President Trump continued to post threats on social media. And here we are, Monday morning.

The agenda

2pm BST: ECB President Christine Lagarde appears before the European parliament's economic and monetary affairs committee