(Updates at 0850 GMT)
Major European equity markets were lower on Thursday after a raft of corporate earnings in the U.S. and Europe, while prospects of upcoming policy easing in the United States boosted global bonds.
The Federal Reserve held interest rates steady on Wednesday but opened the door to a cut in September. Traders were wagering that the Bank of England might move later in the day, with the probability of a quarter-point cut around 60%.
0#BOEWATCH Major European markets were mostly lower with the pan-European STOXX 600 .STOXX down 0.6%, and Germany's DAX .GDAXI and France's CAC 40 .FCHI both nursing losses of almost 1.3%.
Britain's FTSE 100 .FTSE was down 0.3% before the BoE's interest rate decision at 1100 GMT.
"The fact that some heavyweights are cutting guidance does not bode well going forward and might well explain why European markets are underperforming," said Stephane Ekolo, equity strategist at TFS Derivatives.
"Disappointing set of results, slowing growth for industrials, Chinese consumers no longer there to rescue demand and a possible resurgence of inflation. You have a not so pleasant cocktail."
Nasdaq futures NQc1 gained 0.1% as shares of Facebook-parent Meta Platforms META.O surged 7% pre-market on strong earnings. The index .NDX rose 3% on Wednesday, while the S&P 500 .SPX climbed 1.6%.
U.S. tech stocks have made an extraordinary comeback after the recent sell-off. AI darling Nvidia NVDA.O rallied 13% on Wednesday, adding about $330 billion in stock market value.
Tech giants Apple AAPL.O and Amazon.com AMZN.O will report their earnings later on Thursday.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 0.4%, after ending July mostly flat. A regional MSCI IT index .MIAPJIT00NUS jumped 1.7% and Taiwan's shares .TWII surged 2%.
Japan's Nikkei .N225 , however, tumbled 2.5% as a sharp jump in the yen clouded the outlook for exporters.
The Japanese yen JPY=EBS rallied to as much as 148.51 per dollar its strongest level since March 15, a day after the Bank of Japan raised interest rates for the second time in 17 years and signalled more tightening to come.
It was last up 0.3% at 149.54.
FED SIGNALS SEPTEMBER CUT Eyes remained on the monetary policy outlook after Fed Chair Jerome Powell said policymakers had a "real discussion" about cutting at the July meeting.
The central bank also said the risks to employment were now on a par with those of rising prices.
As a result, markets - which have already bet on a September cut - are wagering on a 10% chance that the Fed may go for a 50 basis points easing in September. For all of 2024, they have priced in a total easing of 72 basis points.
"The statement was notable in that they removed the tightening bias and replaced it with a more neutral bias," said Jan von Gerich, chief analyst at Nordea.
"It's early but the fact we haven't really seen the rally continue suggests that markets may be trying to catch some breath before tomorrow's payrolls report."
Treasuries extended their gains from Wednesday with the yield on 10-year Treasuries US10YT=RR down 5 basis points to 4.0564%, having dropped 11 bps the day before to the lowest since March. Yields move inversely to prices.
After falling 0.4% on Wednesday, the dollar index =USD rebounded 0.3%, with the euro EUR=EBS down 0.4% and sterling GBP=D3 lower by 0.5%.
In commodity markets, oil prices extended their surge after the killing of a Hamas leader in Iran raised the threat of a wider Middle East conflict.
Brent crude futures LCOc1 rose 0.9% to $81.57 per barrel, while U.S. West Texas Intermediate crude futures CLc1 increased 1% to $78.65 per barrel.
Brent jumped about 2.3%, while U.S. crude rose over 4% in the previous session.
Gold was down 0.5% at $2,435 an ounce XAU= .
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