LONDON, Aug 4 (Reuters): Global shares were driven by strong earnings to a record high on Wednesday, while the dollar and Treasury yields languished waiting for US employment data to provide clues about the pace of monetary tightening in the world's biggest economy.
US stock futures pointed to a quiet open on Wall Street, flat to up 0.1 per cent.
Strong corporate profits have eased concerns over the COVID-19 pandemic, as vaccine roll-outs continue apace in developed markets, despite a resurgence of cases in Asian countries including China.
While that has helped buoy equities, inflationary pressures and a growing belief the US Federal Reserve may soon signal its intention to trim support to the economy continue to cause a tussle with the bond market over mid-term direction.
"Macro data is coming at high expansionary levels but currently all the market is seeing is peak data. It wants to know what's going to be the glide path over the next 12 months. Those concerns are playing out in the bond market," said Grace Peters, EMEA head of investment strategy at J.P. Morgan Private Bank.
"When it comes to the equity markets, you have more balance, as lower yields support equities, especially the growth part of the equity market. At the same time, there is strong bottom-up evidence that life is good for corporates."
The MSCI World index, a broad gauge of equity markets, was last up 0.2 per cent, tracking overnight gains in Asia, where the equivalent index, excluding Japan rose 0.9 per cent.
Across Europe, the STOXX Europe 600 and FTSE 100 were up 0.5 per cent-0.6 per cent, with the latter supported by strong results from housebuilder Taylor Wimpey and insurer Legal and General.
Close to 90 per cent of companies listed on the S&P500 have reported positive earnings surprises for the second quarter, National Australia Bank (NAB) economist Tapas Strickland said.
"Aside from (the) healthy earnings outlook, we also see equities being supported by continued monetary stimulus from the Federal Reserve and the attractiveness of stocks relative to low bond yields," said Mark Haefele, Chief Investment Officer, UBS Global Wealth Management in a note.
Investors expect volatility to increase in August as more companies report earnings and the market hears from Federal Reserve officials in coming weeks.
While all eyes will be on the latest US non-farm payroll numbers on Friday - the last before US central bankers convene at Jackson Hole to discuss policy - markets are also set to take a hint from Wednesday's US ADP employment survey.
Ahead of the data, the US dollar was up 0.1 per cent against a basket of currencies while benchmark Treasury yields were up 1 basis point at 1.182 per cent.
Elsewhere in currencies, the pound was up 0.1 per cent against the dollar while the euro was down 0.1 per cent. Bitcoin was down 0.1 per cent at just over $38,000, with ethereum up 0.8 per cent ahead of a network upgrade.
Euro zone government bond yields hovered near recent lows, with the German 10-year yield at -0.492 per cent, little moved by July euro zone purchasing managers index survey data that came in slightly worse than expected.
In commodities, Brent futures gave up early gains to last trade 0.2 per cent lower at $72.27 a barrel, while US crude was down 0.4 per cent at $70.27 a barrel.
Spot gold was up 0.2 per cent at $1,813.3 an ounce.
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