GLOBAL MARKETS-Stocks on inflation stand-by as intervention watch dogs yen

Investors kicked off a shortened week in subdued mood on Monday with stock benchmarks steady near last week's lifetime highs as looming U.S. inflation data provides the next milestone in the summer rate cut narrative. The dollar eased, with the threat of currency intervention from Japanese authorities and a government-driven rally in China's yuan weighing on the U.S. currency. The yen, however, was still within striking distance of a 32-year low as Japan's top currency diplomat said on Monday the currency's weakness did not reflect fundamentals, adding to the rhetoric of government officials who have stepped up warnings in recent days over the currency's decline.