* EU stocks and U.S. futures trade roughly flat
* Oil prices fall as Iran and U.S. say progress made in
talks
* Sterling and UK bonds rise after PM Starmer resigns
(Updates prices)
By Wayne Cole and Harry Robertson
SYDNEY/LONDON, June 22 (Reuters) - European stocks and U.S.
futures steadied while oil prices dipped on Monday after
mediators said progress had been made in U.S.-Iran peace talks,
helping calm fears the fragile process to end the war was
breaking down.
Meanwhile, the pound and UK bonds rose after Prime Minister
Keir Starmer announced his resignation, paving the way for
Britain's seventh leader in 10 years.
The Iran war talks had earlier been overshadowed by Tehran's
announcement it had again closed the Strait of Hormuz, prompting
U.S. President Donald Trump to threaten fresh attacks.
But officials from Qatar and Pakistan said progress was made
on a roadmap to reach a final deal in 60 days. That was backed
up by U.S. Vice President JD Vance, who said Tehran had agreed
to allow nuclear inspections.
The apparent progress in discussions saw Brent crude
futures shed early gains to ease 1.8% to $79.07 a barrel, far
below its May peak of $126.41.
Europe's STOXX 600 index wavered and was last up
0.15%, while U.S. S&P 500 futures pared early losses to
trade 0.1% lower.
"There does appear to be further progress being made during
talks in Switzerland towards a lasting settlement, and oil
prices have dipped again," Susannah Streeter, chief investment
strategist at Wealth Club, said of the Iran talks.
"It is clear there is still a long way to go, and more
obstacles may emerge before a long-term deal is signed."
Asian stocks climbed overnight, supported by the apparent
progress in peace talks. Japan's Nikkei rose 1.6%, while
South Korea's red-hot market added 0.7%, after surging
more than 11% last week on demand for semiconductor stocks.
STARMER RESIGNATION CLOUDS UK OUTLOOK
The pound reversed earlier losses to trade flat at $1.324
while gilts rose on Monday after Starmer announced his
resignation, which had been widely rumoured over the weekend.
Former Manchester Mayor Andy Burnham is the favourite to
succeed Starmer, but investors said a key question for nervy UK
bond markets would be who becomes finance minister.
"A new leader does not fundamentally alter the difficult
fiscal situation they're going to inherit," said Nick Rees, head
of macro research at Monex Europe.
The euro eased 0.15% to $1.146, after hitting a
three-month low on Friday at $1.1418.
Treasuries remained under pressure following a hawkish turn
by the Federal Reserve last week that led markets to price in a
75% chance of a rate hike as early as September.
Futures imply around 38 basis points of tightening by
year-end, while yields on 2-year notes rose as much
as 4 basis points to the highest since early 2025 at 4.230%.
"Our baseline call is for patience and a first hike in the
second half of 2027, but (we) believe the margin for error and
the tolerance for further inflation is limited, with genuine
risks of earlier hikes," said Fabio Bassi, head of cross-asset
strategy at JPMorgan.
The Fed's hawkish outlook helped push the dollar up 0.3% to
161.71 yen, with only the threat of Japanese
intervention preventing the currency rising to 2024's 40-year
high of 161.96.