SYDNEY/LONDON (REUTERS)

European stocks and US futures steadied while oil prices ​dipped on Monday after mediators said progress had been made in US-Iran peace talks, helping calm fears regarding the end of the Iran war.

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.

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 US 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 US 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. “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.

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 favorite to succeed Starmer, but investors said a key question for nervy UK bond markets would be who becomes finance minister.

The euro eased 0.15% to $1.146, after hitting a three-month low on Friday at $1.1418.

Treasures 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%.

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.