"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%, tracking overnight gains in Asia, where the equivalent index, excluding Japan rose 1%.
Across Europe, the STOXX Europe 600 and FTSE 100 were up 0.4%-0.6%, with the latter supported by strong results from housebuilder Taylor Wimpe and insurer Legal and General.
U.S. stock futures ESC1 pointed to a quiet open on Wall Street, hovering either side of flat.
Close to 90% 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 U.S. non-farm payroll numbers on Friday - the last before U.S. central bankers convene at Jackson Hole to discuss policy - markets are also set to take a hint from Wednesday's U.S. ADP employment survey.
Ahead of the data, the U.S. dollar was up 0.1% against a basket of currencies while benchmark Treasury yields were up 1 basis point at 1.182%.
Elsewhere in currencies, the pound was up 0.2% against the dollar while the euro was flat. Bitcoin was down 0.8% at just under $38,000, with ethereum down 0.1%, paring early losses ahead of a network upgrade.
Euro zone government bond yields hovered near recent lows, with the German 10-year yield at -0.489%, 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% lower at $72.30 a barrel, while U.S. crude was down 0.4% at $70.26 a barrel.
Spot gold was up 0.2% at $1,812.9 an ounce.
(Additional reporting by Sujata Rao and Swati Pandey; Editing by Sam Holmes, Barbara Lewis and Emelia Sithole-Matarise) ((email@example.com; +44 (0) 207 542 5052; Reuters Messaging: Reuters Messaging: firstname.lastname@example.org))