European Stocks Called Higher; U.S. Dollar Extends Gains on Tax Cut Hopes

European stocks are expected to extend gains Thursday as global investors react to early tax reform proposals from U.S. President Donald Trump and near-term rate hikes from the Federal Reserve.

Global market reaction to the President's plans, which include slashing the rate of corporate tax and making the repatriation of overseas profits more seamless, has been mixed thus far, however, given the questions that surround his ability to build consensus in Congress.

The broadest measure of shares in Asia, the MSCI ex-Japan index, slipped modestly into the start of European trading while a strong U.S dollar, which extended past a one-month high with a 0.23% gain against a basket of six global currencies, weakened the yen and helped build a 0.5% gain for the Nikkei 225 into the final hour of trading in Tokyo.

European currencies are also softer against the dollar, which is helped by higher U.S. Treasury bond yields, with the euro slipping 0.1% to 1.1731 and the pound retracing a similar amount to 1.3371.

Against that backdrop, financial bookmakers IG are pricing in a 0.08% rise for Britain's FTSE 100 and a stronger 0.22% gain for the DAX performance index in Germany.

Global oil markets are also expected to be active after prices fell sharply Wednesday following a surprise 1.8 million barrel decline in U.S. crude inventories reported by the Energy Information Administration.  

West Texas Intermediate crude futures for November delivery were marked 0.4% lower into the start of European trading at $51.93 while Brent contracts for the same month, the global benchmark, were seen 0.35% lower at $57.70.

Early indications from U.S. equity futures suggest a flat open on Wall Street, with both Dow Jones and S&P 500 mini prices pointing to little more than a 0.01% gain at the opening bell.