European stocks may open higher on Thursday, tracking firm cues from Wall Street and Asia as investors took in their stride signs of inflation pickup in the U.S. and the possibility of an interest rate increase at next month's Fed policy meeting.
In brief remarks during a ceremonial swearing-in, new Fed Chairman Jerome Powell said the Federal Reserve will seek to normalize its policies in a way that will extend the recovery and bolster its goals of achieving stable inflation and maximum employment.
He also said that the Fed will keep an eye on financial-system risks following the recent wild swings in financial markets.
Asian stocks edged higher following sharp gains on Wall Street overnight. Trading volumes remain relatively thin amid holidays in China, South Korea and Taiwan for the Lunar New Year.
The Japanese yen touched a new 15-month high against the dollar, while oil held firm after rallying on Wednesday on dollar weakness and data showing a less-than-expected rise in U.S. crude inventories.
The South African rand hovered near a 2-1/2-year high against the dollar as President Jacob Zuma resigned from office under pressure from the ruling African National Congress.
Foreign trade data from euro area and Europe's new care registration figures for January are due today, headlining a light day for the European economic news.
Across the Atlantic, trading may be impacted by reaction to another batch of key economic data, including reports on producer prices, industrial production and homebuilder confidence.
U.S. stocks rose for a fourth straight session overnight and bond yields jumped as stronger-than-expected January inflation data convinced the market that the Fed will raise rates a total of four times this year, keeping the March hike in play. Investors shrugged off weaker-than-expected retail sales data for last month.
The Dow rallied 1 percent, the tech-heavy Nasdaq jumped as much as 1.9 percent and the S&P 500 surged 1.3 percent.
European shares also advanced on Wednesday as solid GDP data from Germany and the Eurozone helped investors shrug off the U.S. inflation report pointing to faster interest rate hikes.
The pan-European Stoxx Europe 600 index climbed 1.1 percent. The German DAX gained 1.2 percent, France's CAC 40 index rose 1.1 percent and the U.K.'s FTSE 100 added 0.6 percent.
by RTT Staff Writer
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