On Saturday, US President Donald Trump stated that Washington and Tehran had 'largely negotiated' a peace deal that would reopen Hormuz, through which a fifth of global crude and liquefied natural gas shipments flowed prior to the conflict.
However, Trump said on Sunday that he had instructed his representatives not to rush into any agreement with Iran, while his administration played down expectations of an imminent breakthrough in the war.
Prospects for a deal pushed oil prices lower, falling around 6%, with both benchmarks, Brent and WTI, hitting two-week lows below 100 dollars a barrel.
'Even if the agreement is signed, the return to supply normalcy will be slow. Time is needed to repair damaged energy assets and return production to pre-war levels,' Renta 4 noted in a client memo.
On the macroeconomic front, investors are awaiting the US PCE index, the Federal Reserve's primary inflation gauge, and US GDP data, alongside May's Eurozone confidence indicators, due on Thursday.
'The macro data being published appears less deteriorated than feared regarding the economic cycle. And the spike in inflation, reaching nearly +4% in the US and slightly over +3% in Europe, seems to have been digested,' Bankinter analysts said on their Telegram channel. 'It is likely to moderate from now on.'
Lower market volatility is expected this Monday due to bank holidays in the United Kingdom and the United States.
At 0709 GMT on Monday, the Spanish blue-chip IBEX 35 was up 281.80 points, or 1.57%, at 18,267.10 points, while the FTSE Eurofirst 300 index of leading European shares advanced 0.69%.
In the banking sector, Santander rose 2.42%, BBVA gained 2.57%, Caixabank advanced 1.71%, Sabadell climbed 1.82%, Bankinter appreciated 1.57%, and Unicaja Banco rose 1.64%.
Among non-financial heavyweights, Telefónica edged up 0.10%, Inditex advanced 1.34%, Iberdrola gained 0.64%, Cellnex rose 1.25%, and oil major Repsol shed 2.83%.
(Reporting by Benjamín Mejías Valencia; editing by Jorge Ollero Castela)
Choose MarketScreener 
