Asian and European stock markets wavered Tuesday as investors geared up for key inflation numbers later in the week, while London returned to action after a three-day long weekend.
With Wall Street also shut Monday for a holiday, there were few catalysts to drive business, though comments from European Central Bank (ECB) officials reinforced optimism over a eurozone interest-rate reduction in June.
"Risk sentiment has faltered in recent weeks, and global stock markets have experienced a mild sell off as the focus shifts to a plethora of economic data that is released this week" concerning inflation, commented XTB research director Kathleen Brooks.
"The focus will be the eurozone's first reading of May CPI and the US core PCE index, both released on Friday."
The ECB appears set cut rates next week after chief economist Philip Lane told the Financial Times that "barring major surprises" the next direction will be downward as inflation continues to slow.
The US Federal Reserve will focus Friday on the US personal consumption expenditures (PCE) index, which is forecast to have seen a slight slowdown in April from the previous month.
"PCE, the Fed's preferred inflation measure, is expected to have slowed to 0.2 percent in April compared to the previous month," noted ActivTrades analyst Ricardo Evangelista.
"This scenario will solidify expectations of a Fed rate cut in September if confirmed," he added.
Figures last Friday, showing US consumer confidence picking up and inflation expectations coming down, provided traders enough confidence to propel hopes for at least one rate cut before January.
The PCE reading comes after a number of policymakers warned in recent weeks that they were cautious about cutting rates too soon and wanted to see more data proving price pressures are easing.
In commodities, oil prices rose further before a June 2 output meeting of OPEC and other major producers. They are tipped to maintain output cuts.
"If the OPEC+ production cuts are maintained in the third quarter, the oil market is likely to be undersupplied in the summer months," noted Commerzbank analyst Carsten Fritsch.
At the same time, the start of the US driving season -- when many Americans hit the roads for their summer vacation -- is widely expected to boost demand for motor fuel.
Key figures around 1050 GMT
London - FTSE 100: DOWN 0.2 percent at 8,303.59 points
Paris - CAC 40: DOWN 0.4 percent at 8,103.14
Frankfurt - DAX: UP 0.2 percent at 18,804.71
EURO STOXX 50: FLAT at 5,059.97
Tokyo - Nikkei 225: DOWN 0.1 percent at 38,855.37 (close)
Hong Kong - Hang Seng Index: FLAT at 18,821.16 (close)
Shanghai - Composite: DOWN 0.5 percent at 3,109.57 (close)
New York - Dow: Closed for a holiday
Euro/dollar: UP at $1.0870 from $1.0857 on Monday
Dollar/yen: UP at 156.95 from 156.82 yen
Pound/dollar: DOWN at $1.2766 from $1.2774
Euro/pound: UP at 85.15 from 85.01 pence
West Texas Intermediate: UP 1.6 percent at $78.96 per barrel
Brent North Sea Crude: UP 0.2 percent at $83.28 per barrel