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European Shares Seen Flat To Higher

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European stocks may open higher on Thursday as the dollar came off its recent lows, benefiting from the euro's weakness and higher U.S. yields after U.S. Congress leaders reached a two-year bipartisan budget deal worth around $300 billion.

Asian stocks are trading mixed and Brent crude futures hovered near six-week lows on worries over surging U.S. output while gold held on to losses from the previous session on expectations of more U.S. interest rate hikes this year.

China's exports grew at a faster-than-expected pace in January, a government report showed, helping support underlying sentiment to some extent.

Oil extended losses for a fifth day after the U.S. government reported crude stockpiles rose by 1.9 million barrels.

The Bank of England is expected to keep interest rates on hold when it reviews its monetary policy later today. Investors will keep an eye on the minutes from its latest policy meeting as well as updated forward guidance via the Quarterly Inflation Report.

Data from the Royal Institution of Chartered Surveyors showed earlier today that U.K. house price balance remained stable in January even as buyer enquiries continued to fall. The house price balance remained at 8 percent in January, while it was forecast to drop to 5 percent.

Separately, the report on jobs compiled by the Recruitment and Employment Confederation and IHS Markit revealed that permanent staff placements in the U.K. increased at the quickest pace since July in January.

Overnight, U.S. stocks fell in the final hour of trading to close lower as sentiment changed from unbridled optimism to skepticism amid the threat of rising inflation and mixed remarks from Federal Reserve officials.

According to Chicago Federal Reserve President Charles Evans, the Fed can hold off raising rates until "mid-year or so" in order to assess the incoming inflation data.

On the other hand, his colleague Fed New York President William Dudley said that recent stock-market declines don't yet change his outlook for interest rates on the broader economy.

The Dow slid 0.1 percent overnight, the S&P 500 dropped half a percent and the tech-heavy Nasdaq Composite shed 0.9 percent.

European markets rose sharply to snap a seven-day losing streak on Wednesday, tracking overnight gains on Wall Street and amid reports that Germany's center-right and center-left parties have agreed in principle on a new coalition deal.

The pan-European Stoxx Europe 600 index jumped 2 percent. The German DAX rallied 1.6 percent, France's CAC 40 index advanced 1.8 percent and the U.K.'s FTSE 100 added 1.9 percent.

by RTT Staff Writer

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