Investors await key US job reports

As investors digest the broadly hawkish tone of the minutes of the last Federal Reserve meeting, ahead of jobs reports in the US, European stock markets are expected to open marginally lower Thursday morning.

There will be a release of the November Eurozone Producer Price Index later in the session, which will provide more insight into the direction of inflation in the eurozone.

As a result of the minutes of the Federal Reserve's December meeting, European equities are expected to have a more negative tone than they have in the past after it was revealed that even though policymakers want to slow down the pace of interest rate hikes, they also want them to remain higher for a longer period of time.

EUR/USD to remain sideways ahead of key data release

In the early hours of Thursday morning, after having managed to end a two-day losing streak on Tuesday, EUR/USD has been moving sideways in a tight channel near 1.0600. In case markets remain cautious ahead of Friday's key data releases, the Euro may struggle to find demand in the event the pair's technical outlook does not yet indicate a buildup of recovery momentum.

As a result of the data released by the ISM, which indicated that employment in the manufacturing sector grew unexpectedly in December, the selling pressure surrounding the US Dollar in the second half of Wednesday's trading session softened. Moreover, on the last business day of November, the US Bureau of Labor Statistics reported that there were 10.45 million job openings, which was way above the market's expectations of 10 million.

In December, ADP Employment Change is expected to rise modestly from the previous month's 127K to 150K. As investors reassess the probability of a 25 basis point Fed rate hike in February, a stronger job growth rate in the private sector could lead to the US Dollar strengthening in the early American session.

Oil snapped its decline

A rise in COVID-19 cases in China and a warning from the IMF that there could be a recession in 2023 are raising fears that there will be no demand in the near future. However, energy prices rose on Thursday after two sessions of steep declines due to COVID-19 cases in China.

Approximately 3.3 million barrels of crude oil were added to U.S. crude inventories during the last week of December, according to data provided by the American Petroleum Institute. This build has been partly attributed to releases from the Strategic Petroleum Reserve, which suggests that fuel consumption remained robust throughout the holiday season due to releases from the Strategic Petroleum Reserve.

Official data from the Energy Information Administration will be studied later in the session for confirmation. According to data from Refinitiv Eikon, both contracts declined by more than 9% cumulatively on Tuesday and Wednesday, which is the biggest two-day decline at the beginning of a year since 1991.