FirstFT: US and Iran complete prisoner exchange in diplomatic breakthrough

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Good morning. The US and Iran have completed a high-stakes prisoner swap after months of negotiations, a breakthrough that Washington hopes will open the door to a de-escalation of tensions between the arch foes.

In a carefully sequenced process, five American-Iranian dual nationals, as well as two relatives, landed in Qatar on Monday after being released by the Islamic republic. They were greeted by officials and family members after landing in Doha. The US has also freed five Iranians from American prisons.

The exchange took place after $6bn in Iran’s oil revenue, which had been frozen in South Korea, was transferred to bank accounts in Qatar, where the funds will be monitored to ensure they are used appropriately.

The hope is that the release of the prisoners will help build a degree of trust that creates conditions for further discussions on Iran’s muscular nuclear programme.

The swap “does remove an obstacle” to further diplomacy on Tehran’s nuclear ambitions and other issues, said a senior official in US president Joe Biden’s administration. “We do not close the door entirely to diplomacy,” the official said. “If we see an opportunity, we will explore it.” Read the full story.

Here’s what else I’m keeping tabs on today:

• Economic data: OECD publishes its Interim Economic Outlook Report, and the EU has its consumer price index and harmonised index of consumer prices from last month.

• United Nations: The UN’s general assembly convenes, with speeches today from Ukraine’s president Volodymyr Zelenskyy and US president Joe Biden.

Five more top stories

1. China’s central bank has lifted temporary curbs on gold imports that were imposed on some lenders in a bid to defend the renminbi. The spread between the Shanghai gold price and London hit a record $121 per troy ounce last Thursday, but narrowed to $76 on Monday after the People’s Bank of China relaxed curbs on imports of the precious metal last week, according to people familiar with the informal order given to some state and midsized commercial banks.

2. A build-up of leveraged bets has the potential to “dislocate” trading in the $25tn US Treasuries market, the umbrella group for central banks said on Monday. The Bank for International Settlements issued a warning in its quarterly report about the growth of the so-called basis trade — whereby hedge funds seek to exploit the tiny differences between the prices of Treasury bonds and their equivalents in the futures market. It was the latest high-profile warning about the financial stability risks posed by the build-up.

3. Saudi Arabia’s energy minister has insisted that the kingdom’s decision to extend oil production cuts was not about “jacking up prices” even as crude futures push towards $100 a barrel. Riyadh and Moscow earlier this month announced they would prolong cuts to production and exports to the end of the year. Brent crude has since increased more than 5 per cent and on Monday rose another 1 per cent to almost $95 a barrel, a new 2023 high. 

4. Exclusive: Western companies have been blocked by Russia from accessing $18bn in profits generated in the country last year as the Kremlin looks to pressure “unfriendly” nations, including the US, UK and EU members. Foreign companies trying to sell their Russian businesses need Moscow’s approval and face steep price discounts.

5. Ride-hailing app Lyft has agreed to pay a $10mn penalty to the Securities and Exchange Commission to settle an investigation into disclosures relating to the sale of Carl Icahn’s stake in the company ahead of its initial public offering in 2019. The Wall Street regulator said Lyft failed to disclose that Jonathan Christodoro, a director on the company’s board until March 2019, had made millions from arranging the sale of Icahn’s 2.6 per cent stake in the ride-hailing group. Read the full story.

News in-depth

The houses in Dragon Pearl Garden may have cracked pipes and sinking foundations, but the hundreds of people living in this faded neighbourhood in Shanghai have no intention of leaving any time soon. “I will stick to my house unless the government pays me Rmb20mn to relocate,” said one resident. The stand-off highlights the challenges facing China’s plan to revitalise the property sector partly through redevelopment of these so-called urban villages.

We’re also reading . . . 

• What’s driving the west’s protectionism? A fear that Chinese competition is undermining not only their economies but also their social and political stability, writes Gideon Rachman.

• Erdoğan’s autocratic recipe for Turkey: Recep Tayyip Erdoğan’s tactical moves are aimed at strengthening his one-man rule, writes Gönül Tol, and the west is helping him.

• ‘There is no work to balance’: FT’s reader survey shows how shrinking budgets, Covid and AI shook up life in consulting.

Chart of the day

Germany’s central bank warned companies on Monday to reduce their dependence on China. The Bundesbank said that 29 per cent of German companies import essential materials and parts from China, exposing their operations to “significant” damage if this trade route was disrupted as a result of “increasing geopolitical tensions”.

Take a break from the news

Iranians have found few reasons to rejoice of late, with the economy on its knees and their country under international sanctions. The arrival of superstar footballer Cristiano Ronaldo, whose Saudi club plays in Tehran on Tuesday evening, has provided moments of excitement and humour — but his visit has not been without controversy.

Additional contributions from Tee Zhuo and Gordon Smith