Europe's financial markets have made a solid start to the second half of the year, with stocks brushing off a rapid re-acceleration in the region's coronavirus cases and both the dollar and oil extending their strong first-half rallies.
Early one per cent gains in London, Frankfurt, Paris and Milan meant the pan-European STOXX 600 was close to joining Wall Street back at record highs.
In an Asia session thinned by a holiday in Hong Kong, Japan's Nikkei fell 0.3 per cent and the yen hit a 15-month low at 111.18 per dollar as the US currency continued its steady grind higher.
There was little sign of oil prices easing off. Brent was up nearly one per cent at just over $US75 a barrel after a roaring 45 per cent first-half rise had scored one its best starts to a year on record.
Eurozone government bond yields also inched up as the latest economic data showed the bloc's manufacturing sector expanded at a record pace last month, while firms were seeing the steepest rise in raw materials costs in well over two decades.
Germany's benchmark 10-year Bund yield was up one basis point on the day, at -0.19 per cent. French, Spanish and Italian 10-year yields were up by a similar amount .
Most major economies have seen their government bond yields, which drive borrowing costs, rise sharply this year on bets central banks will slow stimulus as a global recovery pushes up inflation.
Due to a shortage of shipping containers, and supply chains hugely affected by the pandemic, the eurozone data's input prices index soared to 88.5 from 87.1. The bloc's inflation had dipped to 1.9 per cent last month, official data on Wednesday had shown.
"The virus is still playing a role ... although it's difficult to see much direction in anything at the moment," ING economist Rob Carnell said from Singapore.
"There's a broad sense that the dollar isn't such a bad unit to be holding," he said, as traders also awaited US jobs data due Friday for clues on the Federal Reserve's next move.
In China overnight, equity markets had cheered the centenary of the Communist Party with a small rise, but a nationalist address from President Xi Jinping did little to soothe geopolitical nerves and the yuan weakened very slightly.
Data in Asia also painted a mixed picture, with Japanese manufacturers' mood good at a two-and-a-half year high, but factory activity slowing down through the region - particularly in Vietnam and Malaysia - on a resurgent pandemic.
Slower vaccination rates in Asia and the extension of restrictions to curb the spread of the virus - as well as a regulatory crackdown on Chinese tech giants - have had regional markets lagging.
The MSCI ex-Japan index closed out the first half with a gain of 5.8 per cent compared with world stocks' rise of 11.4 per cent and a gain of 14.4 per cent for the S&P 500, which had logged its fifth consecutive record as it closed out H1 on Wednesday.
However, it is US payrolls on Friday traders think could jolt markets from a slumber that has locked currencies in some of their tightest trading ranges for decades.
June had been the best month for the US dollar since Donald Trump was elected president in November 2016, MUFG's currency analyst Lee Hardman said.
"The key trigger," he said, "has been the hawkish shift in the Fed's policy stance. The more hawkish guidance has left market participants less confident that the Fed will maintain loose policy in the coming years."
The US dollar index, which measures the greenback against a basket of six major currencies, hit 92.500, its highest since April. The yield on benchmark 10-year US Treasuries was up a touch at 1.4747 per cent.
In commodity markets, prices for metals seemed to be stabilising below May peaks while oil was eyeing multi-year highs touched earlier in the week.
Brent crude futures were last up 1.31 per cent at $US75.60 a barrel.