Iranian President Pezeshkian says the Supreme Leader has granted the government some authority on dialogue, ISNA reports

OIL FALLS TO INTRADAY LOW, BRENT TRADES NEAR $106/BBL

Oil prices down 6% on hopes of US-Iran diplomacy

This marks some of the most significant confirmation yet that the Supreme Leader - who has been in hiding and not seen in public since the assassination of his father upon the opening of Operation Epic Fury - is still 'open' to a negotiated solution to the war. It has long been speculated that he and the more 'hardline' IRGC and affiliated officials are against talks and are preparing for war.

Meanwhile, more Monday reporting of 'breakthroughs' via regional sources - and the possibility that Washington might give up on isisting the nuclear enrichment issue be resolved...

A breakthrough in US-Iranian negotiations was seen after Qatari mediation successfully overcame procedural obstacles, reports Al Jadeed citing a diplomatic source

The US is leaning towards not making the nuclear issue a priority and instead including it within the overall negotiation framework.

Washington's priority is achieving a breakthrough in the nuclear file, which Trump would present to the American people, in exchange for concessions on other issues in favor of Iran.

There are fears that Netanyahu will succeed in undermining the breakthroughs in the US-Iranian negotiations and pushing the region towards escalation and war.

Any US-Iranian agreement will inevitably have repercussions for Lebanon, while any war on Tehran would be fateful and would push Hezbollah to enter it.

Implementing any agreement on Lebanon requires Israel's conditional approval, which is contingent upon Hezbollah's disarmament and the dismantling of its military apparatus; otherwise, Israel will launch a war to achieve its objectives.

Presdient Trump too has signaled he wants to give diplomacy more time, amid reports that Israel's Netanyahu is lobbying for more military action.

Newsquawk notes of the immediate reaction in markets: Risk-on trade seen as reports Iran's Pezeshkian said the Supreme Leader has granted the government some authority on dialogue got wider airing; downside in oil and the Dollar, with upside in US equity futures, Treasuries and spot gold.