Europe open: Stoxx rebounds as investors await Fed minutes, Powell speech

European stocks rallied on Wednesday after closing in the red a day earlier and snapping a five-day run of gains as investors eyed the release of minutes from the US Federal Reserve for commentary on inflation and interest rate prospects.

The pan-regional Stoxx 600 index was up 0.09% to 512.72 in early deals with all major bourses in the green.

Also coming up is Fed chair Jerome Powell’s speech at the central bank symposium at Jackson Hole on Friday.

"The debate has now moved past whether there will be a rate cut to how aggressive the initial move could be. The latest estimates reveal a 70% likelihood of a 0.25% cut, with the outlier of a 0.5% reduction coming in at a 30% chance," said Interactive Investor head of markets Richard Hunter.

"There will be other factors playing out before the next Fed meeting, not least of which will be the next non-farm payrolls report which is due for release on 6 September, which will rekindle concerns given the shock reaction to the previous reading earlier this month."

"In the meantime, the Labor Department will today release revisions to its latest employment data for the year to March, with any significant downward change likely to consolidate calls for an interest rate cut next month."

Shares in Voestalpine led the gainers as Morgan Stanley upgraded the Austrian speciality steelmaker to "overweight" from "equal-weight" citing its resilient business model through the down-cycle.

The broker said despite the challenging market environment in the European and global steel industry, the company's core earnings per tonne outperformed peers and this was expected to continue.

Reporting by Frank Prenesti for Sharecast.com