Europe Seen Higher on Oil Bounce and Cautious Fed

European equity markets are poised to open higher on Thursday, breaking a three day losing streak following a positive session in the U.S. and a bounce in oil prices.

Brent crude rebounded off its lows on Wednesday to end the session higher although I remain unconvinced that it can push on much from here. It is looking a little toppy to me and while it continues to be well supported around $46.65, it is also being sold into at an earlier stage each time it rallies. I think we could see it break lower over the next couple of weeks.

Source – OANDA fxTrade Platform

The cautious tone from the FOMC minutes on Wednesday may be giving investors a lift today. The Brexit vote alone is likely to deter them from raising rates until at least the end of the year as they wait to see what the knock on effects will be, both from an economic and financial markets perspective.

We’ll get the monetary policy meeting accounts from the ECBs June meeting today and, as with the Federal Reserve, while the minutes may be of interest, having occurred prior to the Brexit vote they’re going to be somewhat outdated. Still, it will be interesting to see whether Brexit was discussed, whether there is a plan of action in the case of a vote to leave and what it could be.

There’s also plenty of economic data to come today including industrial production figures from the U.K. and Germany, ADP non-farm employment change and jobless claims figures from the U.S. and EIA crude oil inventory data. Last night’s EIA release showed a large drawdown of 6.73 million barrels which far exceeds what is expected from EIA today.

For a look at all of today’s economic events, check out our economic calendar.

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