European stocks are expected to open modestly higher Thursday as investors add cautiously to recent gains but maintain a keen eye on political risks in the weeks ahead of France's Presidential elections and the opening days of Brexit negotiations between London and Brussels.

Germany's DAX index is again expected to lead the pack at the start of trading, with financial bookmakers calling for a 12 point gain to put the benchmark within a few points of a two-year high. Britain's FTSE 100,  however, is likely to fall 5 points at the bell, but much will depend on movements in the pound, which are growing ever-more sensitive to headline risk coming from pending talks on the U.K.'s exit from the European Union.

Stocks in Asia retreated overnight, however, with both Japan's Nikkei 225 (-0.88%) and the broader MSCI Asia ex-Japan (-0.24%) benchmarks posting losses in an otherwise tepid session of trading that was largely dominated by currency and oil market movements. 

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The U.S. dollar, in that respect, continued its recovery from the early November lows it reached on Monday, with a key measure of its strength against a basket of six rival currencies rising to a nine-day high of 100.60 before paring gains to 99.84 at the start of the European session. The gains were linked to hawkish comments from various Federal Reserve officials, including Charles Evans, who suggested that four rate hikes for the 2017 calendar year are still likely, following the Fed's first increase on March 15. 

Global oil prices are also edging higher, with WTI futures for May delivery rising 0.3% to $49.66 per barrel after data from the U.S. Energy Information Agency showed another increase in domestic crude stocks, which now sit at an all-time record of just under 534 million barrels. A surprise dip in gasoline stocks, however, and consistent speculation that OPEC members will agree to an extension of production cuts, has kept a lid on gains.

Early indications from U.S. equity futures are pointing to a similarly muted open on Wall Street, with the Dow Jones Industrial Average expected to add 12.5 points at the bell after Wednesday's 42 point decline. The broader S&P 500 is expected to rise just under 1 point while the Nasdaq is called 8.5 points higher.