LONDON/SYDNEY, May 28 (Reuters) - World shares held near all-time highs on Tuesday and U.S. Treasury yields ticked lower as investors awaited inflation data from both sides of the Atlantic due later in the week.

Traders were keeping an eye on the shift to a shorter settlement in U.S. trading but there were few major moves in advance to the U.S. market open.

Investors in U.S. equities, and other securities, must settle their transactions one business day after the trade instead of two from Tuesday.

Most asset classes, outside commodities, have been trading in fairly narrow ranges in recent weeks, with major share benchmarks near record-highs, European bond yields inching higher and the dollar gradually trending weaker against major peers.

U.S. PCE inflation and CPI inflation data from major euro zone economies this week are the main things that could jolt markets out of their current thinking by affecting expectations of when major central banks will start cutting rates. Inflation data in the euro zone is released from Wednesday, followed by the PCE on Friday.

"If you want big moves you've got to put back the thought that the next U.S. move is a hike into the market's mind," said Kit Juckes, chief FX strategist at Societe Generale.

While he was referring to the dollar, there is a lot of correlation between assets at the moment.

"We were there at the end of the first quarter when we were bombarded by stronger-than-expected -U.S. numbers, but that's all sort of melted away and we're in kind of no man's land," Juckes said.

Markets are currently fully pricing one 25 basis-point Fed rate cut this year, most likely in September or November. They see a one-third chance of a second 25 bps cut by year-end.

In the euro zone, it is all but certain the European Central Bank will cut rates at its meeting next month, though markets are only betting on one further cut by December.

Of interest for policymakers, euro zone consumers lowered their inflation expectations last month, a fresh ECB survey showed on Tuesday.

MSCI's world share index was flat on the day, as was Europe's broad STOXX 600, both near to record-highs hit this month. Asian shares had traded broadly steady earlier in the day, and U.S. S&P 500 futures are up 0.3%.

Emerging markets were also in focus, with Zambia likely to emerge from a lengthy default after the country's finance ministry said more than 90% of holders of its $3 billion in outstanding international bonds had accepted its restructuring proposal so far.

WATCHING JAPAN

Elsewhere, data on Tuesday showed the Bank of Japan's key measurements of underlying inflation all fell in April below its 2% target for the first time since August 2022, heightening uncertainty on the timing of the central bank's next interest rate hike.

But investors appeared more focused on comments made on Monday by BOJ Deputy Governor Shinichi Uchida, who said that the end of Japan's battle against persistent deflation was in sight. Ten-year Japanese government bond yields rose to 1.035% on Tuesday - its highest since April 2012.

That kept the yen in check at 156.95 per dollar, flat on the day, though the Japanese currency softened to its weakest in many years against the pound and Australian dollar.

The cash Treasury market returned from a holiday with prices recovering marginally after taking a hit last week.

Two-year yields fell 2 basis points to 4.927%, having surged 13 bps the previous week, while the 10-year yield dipped a similar amount to 4.453%, after rising 5 bps the week before.

Oil prices extended gains from the previous session. Brent futures inched up to $83.16 a barrel. U.S. crude futures for July were at $78.92 a barrel, up 1.4% from Friday's close, after Monday's U.S. holiday.

Spot gold was down 0.2% at $2343.3 an ounce.

(Reporting by Stella Qiu; Editing by Jacqueline Wong, Edwina Gibbs and Ana Nicolaci da Costa)