Global shares have edged up, while the US dollar slipped further below two-month highs as investors reassessed US Federal Reserve statements on inflation and looked to upcoming data for direction.
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In Europe, the STOXX 600 extended earlier gains to add 0.7 per cent, bolstered by news of German business morale hitting its highest in 2.5 years.
Britain's FTSE 100 share index was 0.5 per cent higher after the Bank of England (BoE) kept the size of its stimulus program unchanged and left its benchmark interest rate at an all-time low of 0.1 per cent, as expected.
The MSCI world equity index was 0.1 per cent higher, edging towards record highs hit earlier in June.
Wall Street futures pointed to a stronger open a day after the tech-heavy Nasdaq closed at a record high.
S&P 500 e-minis and Nasdaq futures were both 0.5 per cent firmer.
In Asia, markets made smaller gains.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.2 per cent higher, recovering from a one-month trough touched earlier this week, while Japan's Nikkei was unchanged.
Stock markets have not known which way to turn over the last week, feeling the after-effects of a surprise projection for rate increases as soon as 2023 by the US Federal Reserve which knocked stocks, boosted the dollar and led to the flattening of the US bond yield curve.
Investors are now pricing the first full US interest rate rise for February 2023 compared to December 2022 in the immediate aftermath of the Fed meeting.
Overnight, 10-year US Treasury yields hovered below 1.5 per cent in muted trading, while government bond yields in the euro area drifted higher.
"Until bond yields break out in a sustainable fashion, in either direction, it remains very hard to determine which direction stocks are headed in over the near term," JPMorgan analysts wrote in a note.
Investors awaited the latest weekly US jobless claims, expected to show that fewer Americans filed new claims for unemployment benefits in the week ended June 19 amid an improving job market recovery.
The US dollar edged further below a two-month high versus major peers as traders navigated conflicting signals from Fed officials on the timing of a withdrawal of monetary stimulus.
On Wednesday, two Fed officials said a period of high inflation in the United States could last longer than anticipated, just a day after Fed Chair Jerome Powell played down rising price pressures.
The US dollar index, which measures the greenback against six rivals, was treading water at 91.773. It was at 92.408 at the end of last week, the highest since April 9.
The euro was a touch higher against the dollar, up 0.2 per cent on the day at $US1.19465.
Against the Japanese yen, the US dollar climbed to a 15-month high of 111.11. It was last slightly weaker at 110.81.
The BoE's decision on Thursday was largely anticipated by economists who expect the central bank will wait to see if a post-lockdown jump in inflation proves transitory and whether unemployment rises when the government scales back its job-protection scheme.
"The belief is that current levels of higher inflation are nothing more than transitionary and there is plenty of slack in the economy," said Jon Hudson, fund manager of the Premier Miton UK Growth Fund.
"With household and business confidence both riding high, it is likely the bank will turn more hawkish in the autumn."
After the announcement, the British pound shed 0.4 per cent against the US dollar to $US1.3907.
Oil prices dipped, but were still close to their highest in almost three years, supported by drawdowns in US inventories.
Brent crude futures fell 0.1 per cent to $US75.10 a barrel and US crude edged 0.1 per cent down to $US72.99 per barrel.
Spot gold prices added 0.3 per cent to $US1784.3 an ounce.
Australian Associated Press
