* Rate futures imply no Fed move this month, while a

September hike is priced in

* Fed's Warsh says inflation expectations have eased, policy

won't be loose

* US crude fell 1.83% to $68.23 a barrel while Brent dropped

2.21% to $71.34

(Updates prices, adds context throughout, changes oil comment

in paragraph 14)

By Rodrigo Campos and Danilo Masoni

NEW YORK/MILAN, July 1 (Reuters) - A gauge of stock markets

around the world was little changed to start the quarter on

Wednesday as the U.S. central bank head said inflation

expectations have fallen but policy won't be loose, while crude

oil prices were down as optimism over U.S.-Iran talks eased

supply concerns.

Traders also watched for possible Japanese intervention in the

currency market after the yen touched fresh 40-year lows against

the dollar, even if it rebounded later in the session.

Speaking on a panel of central bankers in Sintra, Portugal,

Federal Reserve chair Kevin Warsh said inflation expectations

and inflation risks have come down in recent weeks. He said he

will stick firmly to the U.S. central bank's 2% inflation target

and "disappoint" anyone who expects loose monetary policy.

His comments weighed on the dollar, which has been

underpinned by rising expectations of Fed rate hikes this year,

as inflation runs well above the central bank's 2% annual

target. Still, many analysts believe the inflation picture will

improve in the months ahead.

"Nothing that we see suggests that any imbalance either on

the activity side or the inflation side is growing rapidly,"

said Steve Englander, head of global G10 FX research and North

America macro strategy at Standard Chartered Bank's New York

branch.

"You can afford to wait and see how these longer-term

technological trends play out," Englander added. "What we do see

is that unit labor costs are very, very soft, and ultimately

that's what the Fed controls."

The dollar index, which measures the greenback against a

basket of major currencies, rose 0.15% to 101.39, with the euro

down 0.36% at $1.1379. the yen was last flat on the day

against the dollar.

Interest rate futures imply no move from the Fed at its meeting

late this month, while a hike in September is priced in.

Trades also eyed Thursday's economic data expected to show U.S.

employers added 110,000 jobs in June, with the unemployment rate

holding steady at 4.3%, according to the median estimate of

economists polled by Reuters. The ADP National Employment Report

on Wednesday showed that private employment rose by 98,000 jobs

last month, below economists' forecasts for 118,000 job gains.

In afternoon trading on Wednesday in New York, the Dow Jones

Industrial Average rose 50.38 points, or 0.10%, to

52,368.89, the S&P 500 rose 3.37 points, or 0.04%, to

7,502.61 and the Nasdaq Composite fell 69.65 points, or

0.27%, to 26,143.71.

MSCI's gauge of stocks across the globe fell

0.68 points, or 0.06%, to 1,119.78. The pan-European STOXX 600

index fell 0.38%, while Europe's broad FTSEurofirst 300

index fell 11.45 points, or 0.45%. Emerging market

stocks rose 0.70 points, or 0.04%, to 1,723.59.

Japan's Nikkei gained 0.6% after surging 37% last

quarter, with strong tech demand lifting sentiment among big

manufacturers to an eight-year high. South Korea's main index

fell about 2%, following a 68% rally last quarter driven

by AI-fuelled chip demand.

In energy markets, oil prices fell as optimism over

U.S.-Iran talks eased supply concerns.

"There's more optimism as more oil goes through the Strait of

Hormuz," said Phil Flynn, senior analyst for Price Futures

Group. "The market is signalling that once we get past this, the

gloves are going to come off and we're going to probably produce

more oil in the world than we ever have."

U.S. crude fell 1.83% to $68.23 a barrel and Brent

fell to $71.34 per barrel, down 2.21% on the day.

Despite sharp price declines last quarter, both are up almost

20% year-to-date.

Spot gold rose 1.4% after posting on Tuesday its

largest quarterly drop since 2013.