(Alliance News) - Stocks in London are called to open flat on Tuesday, in what is expected to be a muted day with markets in New York on holiday, while equities in Asia traded mixed.

IG says futures indicate the FTSE 100 to open just 2.5 points lower at 7,524.76 points on Tuesday. The index of London large-caps closed down 4.27 points, 0.1%, at 7,527.26 on Monday.

During an abbreviated session in New York on Monday, the Dow Jones Industrial Average closed flat, the S&P 500 added 0.1%, while the Nasdaq Composite rose 0.2%.

"US markets finished their shortened trading session making some modest gains, but interest was relatively low-key with the latest ISM manufacturing numbers for June pointing to continued weakness in that part of the US economy. On a more positive note, if you can call it that, the weak prices paid component of the data showed that inflationary pressure has continued to ease and as such might offer the hope that a July rate hike from the Fed could well be the last one before a lengthy pause," CMC Markets analyst Michael Hewson commented.

In Sydney, the S&P/ASX 20 was up 0.4% in late dealings.

The Reserve Bank of Australia left its key interest rate unchanged Tuesday, with Governor Philip Lowe saying that while inflation had "passed its peak" the economic outlook remained uncertain.

The decision comes after monetary policymakers last month hiked the benchmark rate 25 basis points to 4.1% – its highest level since May 2012.

Lowe on Tuesday cited "uncertainty surrounding the economic outlook" as one reason the board decided to stand pat this month.

"This will provide some time to assess the impact of the increase in interest rates to date and the economic outlook," he said.

Government figures released last week showed the headline rate of inflation dropped to 5.6% on-year in May, from 7.3% – an improvement but still well above the RBA's target range of between 2% and 3%.

Whilst inflation in Australia has already peaked, it is still "too high" and will remain so "for some time yet", Lowe said. Some further monetary policy tightening may be required, he continued.

The Nikkei 225 in Tokyo, fresh from hitting a 33-year closing high on Monday, fell 1.0% on Tuesday. It is still up 28% year-to-date. In China, the Shanghai Composite was down 0.1%, though the Hang Seng in Hong Kong was up 0.3%.

The pound traded at USD1.2686 on Tuesday morning in London, up from USD1.2675 late on Monday afternoon. The euro faded to USD1.0897 from USD1.0905. Against the yen, the dollar edged up slightly to JPY144.62 from JPY144.59.

Brent oil fell to USD74.97 a barrel early Tuesday, from USD75.92 on Monday, as a boost from production cut announcements from two major producers failed to prop up crude for long.

"Saudi Arabia and Russia couldn't wait the next Opec meeting to announce further production cuts. Saudi announced that it will extend the 1 [million barrels per day] cut into August – and maybe further – while Russia said it will reduce its production by half a million. Further cuts came within the knowledge that the oil market will tighten in the H2 as world oil inventories are on track to drain at a quick pace of around 2mbpd. Pricewise? Not much," Swissquote analyst Ipek Ozkardeskaya commented.

Gold faded to USD1,923.65 an ounce on Tuesday morning, from USD1,927.00 on Monday.

Tuesday's economic calendar has German trade data at 0700 BST. The local corporate calendar has a trading statement from grocer Sainsbury's.

By Eric Cunha, Alliance News news editor

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