World stocks steadied on Monday, holding off last week's three-month high, while government bonds rose as investors grew cautious before a series of first-quarter company results due this week.

Key firms reporting their results later on Monday include Bank of America and IBM . Results so far have been better than estimates on both sides of the Atlantic, although a few negative numbers could quickly wipe out optimism in a fickle market.

The markets appear to be in limbo. The question we need to ask ourselves is does being 'less bad' actually equate to being 'good', said Chris Hossain, senior sales manager at ODL Securities.

If we are to see a sustained bout of buying, we need to see consistent positive economic newsflow, which simply can't be guaranteed. Having endured 18 months of pain, it will take more than some okay banking numbers to get the masses to return to the markets. MSCI world equity index <.MIWD00000PUS> was steady on the day, having hit its highest level in three months on Friday.

The pan-European FTSEurofirst 300 index <.FTEU3> was down slightly on the day.

According to Thomson Reuters data, S&P 500 companies are so far reporting earnings that are 20.6 percent above the estimates in the aggregate. This compares with the long-term average of 1.6 percent. The improvement in the Q1 data stems from higher-than-expected numbers from financial sector firms such as Goldman Sachs and Citigroup .

Emerging stocks <.MSCIEF> rose 0.4 percent.

The dollar <.DXY> rose 0.4 percent against a basket of major currencies, while the yen rose 0.2 percent to 99.05 per dollar. The euro hit a one-month low of $1.2969.

The euro looks set to fall further, following the same path as the dollar, sterling and the yen did when they faced month-long selling after their central banks adopted unconventional measures, said Kengo Suzuki, currency strategist at Shinko Securities in Tokyo.

U.S. crude oil fell 1.3 percent to $49.69 a barrel, pressured by a firmer dollar.

The June bund future rose 13 ticks.

(Additional reporting by Atul Prakash; editing by David Stamp)