In the bowl of a stand mixer, combine the warm water, warm milk, yeast, and sugar. Cover and let sit for 5 minutes until the yeast is foamy.
Add the olive oil, salt, and 1 cup of flour. Using a dough hook, mix on low speed until combined, scraping down the sides of the bowl with a rubber spatula.
Add the remaining cup of flour and mix on medium speed until the dough comes together and starts to pull away from the sides of the bowl (about 2 minutes).
Keep the dough in the mixer and beat for an additional 2 minutes, or knead by hand on a lightly floured surface for 2 minutes or until smooth and elastic.
Remove the dough from the bowl using floured hands and shape into a ball. Lightly grease the bowl with olive oil and return the dough, turning it to coat completely. Cover with plastic wrap or a clean kitchen towel and allow the dough to rise in a warm place for 1-2 hours, or until doubled in size.
Punch down the dough and turn it out onto a lightly floured surface. Knead for a couple of minutes until smooth. Shape into a log and place in a greased 8 x 4 inch loaf pan. Cover again and let rise for about 1 hour, or until the dough is about 1 inch above the pan.
Preheat the oven to 180°C (350°F). Bake the bread for 30 minutes, until the top is golden brown. The bread is done when it sounds hollow when tapped.
Allow the bread to cool slightly before removing it from the pan and allowing to cool completely before slicing to prevent tearing. Store leftover bread in an airtight container at room temperature for 2-3 days, or in the refrigerator for up to a week.