A look at the day ahead in U.S. and global markets from Mike Dolan Wall Street looks set for a sleepy but positive start to a shortened week after Monday's Memorial Day break, with the consumer back in focus in May updates later today.

S&P500 futures were higher again ahead of Tuesday's open after the cash index eked out its fifth straight weekly gain last week - the longest such streak since early February.

U.S. consumer confidence is expected to have cooled a touch this month in the Conference Board's monthly survey due later today, although the big release of the week is clearly Friday's PCE inflation gauge.

Even though Federal Reserve interest rate expectations have receded to little more than one cut over the remainder of the year, broader financial conditions captured by the Chicago Fed index are at their easiest since November 2021 - four months before the Fed began its tightening campaign.

This leaves the Fed with an ongoing conundrum as to whether its restrictive monetary policy has been enough to drag inflation durably back to its 2% target as economic growth keeps humming. Annual core PCE inflation is expected to have held at 2.8% in April - even if monthly price gains eased a touch to below 0.3%.

Although on the hawkish side of the Fed's policymaking council, Minneapolis Federal Reserve Bank President Neel Kashkari on Tuesday continued to hold out the possibility of another rate hike if necessary.

And if it is not needed, Kashkari said it would take "many more months of positive inflation data" to give him confidence enough to ease.

Another hawk, Fed board governor Michelle Bowman, even said she would have supported either waiting to start slowing the run-off in the U.S. central bank's balance sheet or a more moderate tapering process than announced earlier this month.

Despite all that, and awaiting another heavy week of debt sales, Treasury yields edged lower on Tuesday. Two and five-year notes come under the hammer later in the day.

Both stock and bond market volatility gauges remain subdued.

Although the U.S. economic surprise index remains in negative territory, it has picked up considerably since last week's punchy May business surveys and the Atlanta Fed's real-time economic growth estimate is tracking 3.5% for the quarter.

Oil prices too picked up a touch on Tuesday ahead of Sunday's online meeting of OPEC+ producers, where traders expect 2.2 million barrels per day of voluntary production cuts to stay in place.

Although U.S. retail gasoline prices have retreated this month, they remain up about 15% for the year to date.

Taking a cue from softer Treasury yields, the dollar was down for the third session in a row.

The euro nudged higher despite money markets seeing almost a 90% chance the European Central Bank will start its rate cutting cycle as soon as next week - even if more buoyant economic soundings and wage numbers of late have scaled back full-year easing expectations a touch there too.

"Barring a surprise, the first rate cut in June is a done deal, but afterwards we have several degrees of freedom," French central bank chief Francois Villeroy de Galhau told Monday's edition of Germany's Boersen Zeitung.

Supporting the ECB's move to jump the Fed gun, surveys on Tuesday showed euro zone household inflation expectations for the next 12 months edged below 3% in April for the first time since 2021.

Overseas stock markets more generally were subdued - mixed in Asia and slightly positive in Europe.

Elsewhere, U.S. markets are set for a new dawn of sorts on Tuesday, when the settlement time for U.S. equities, corporate municipal bonds and other securities will be halved to one day, or T+1, following the adoption of a new Securities and Exchange Commission rule.

Little disturbance was evident as overseas investors adjusted to the changes.

In corporate news, Apple's shares rose 2% ahead of the open on data showing its iPhone sales in China jumped 52% in April from a year earlier as overall smartphone sales in the country increased by more than 25%.

Key diary items that may provide direction to U.S. markets later on Tuesday: * US May consumer confidence, Dallas Fed's May manufacturing survey, March house prices; Canada April producer prices * German Chancellor Olaf Scholz and French President Emmanuel Macron speak at Franco-German summit in Schloss Meseberg north of Berlin * Federal Reserve Board Governor Lisa Cook and Minneapolis Fed President Neel Kashkari speak; European Central Bank policymaker Klaas Knot and Bank of England policymaker Catherine Mann both speak * U.S. Treasury sells 2- and 5-year notes, 3- and 6-month bills

(By Mike Dolan, editing by Ed Osmond, mike.dolan@thomsonreuters.com)