LONDON: European shares began the new quarter with solid gains and Asian shares held near two-year highs, while the dollar lifted from nine-month lows as U.S. Treasury yields hit their highest since mid-May.
Oil prices rose as U.S. drilling activity declined for the first time since January, though gains were capped after a Reuters survey showing OPEC output was its highest of the year last month, reports The Channel NewsAsia.
The pan-European STOXX 600 index, which suffered its biggest month loss in a year in June on worries over tightening monetary conditions, rose 0.7 percent in early trade, led higher by banks and basic resources firms.
France's CAC 40 index rose 0.8 percent, Spain's IBEX 0.9 percent and Italy's FTSE MIB 1 percent. Britain's main FTSE 100 index added 0.3 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan held steady, staying within a stone's throw of a two-year peak hit last week.
Japan's Nikkei ticked up 0.1 percent, buoyed by a Bank of Japan survey showing confidence among big manufacturers hit its highest in more than three months in June.
Chinese blue-chip shares dipped on worries the world's second-biggest economy could be slowing down.
Hong Kong's Hang Seng index rose 0.1 percent, with financial shares benefiting from the launch on Monday of the "Bond Connect" scheme linking China's US$9 trillion bond market with overseas investors.
The dollar index, which measures the greenback against a basket of currencies, rose 0.2 percent as U.S. Treasury yields rose. Ten-year yields hit a high of 2.33 percent and last stood at 2.31 percent, up 1.6 basis points.
The euro, which hit 14-month highs against the dollar last week after European Central Bank President Mario Draghi hinted at tweaks to the bank's bond-buying stimulus program, fell 0.3 percent to US$1.1394.
In anticipation of growing economic strength, manufacturing activity in the euro zone, as measured by IHS Market's purchasing managers' index for Junes, hit its highest since April 2011.