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Wall Street seen higher as oil gains

Katy Barnato
Joe Raedle | Getty Images. Jim Cramer turned to Carley Garner, who looked at the technical signals for crude and made a startling discovery.

U.S. stock index futures ticked higher early on Wednesday, as risk appetite returned to Asian and European stock markets amid an oil rebound.

Brent (Intercontinental Exchange Europe: @LCO.1) and WTI (New York Mercantile Exchange: @CL.1) crude oil futures traded above $31 per barrel on Wednesday, pulling away from the psychologically important $30 mark, after better-than-expected trade data from China.

Chinese exports and imports fell by less than expected in December, leaving a trade surplus of over $60 billion for the month, according to official data.

While the Shanghai composite stock index (Shanghai Stock Exchange: .SSEC) erased early gains to close 2.4 percent lower, Asian markets mostly closed higher on Wednesday, while European markets extended gains.

"China may take a back seat for a day or two, but oil prices remain a threat to markets, as oil-producing countries and companies rethink the medium-term outlook," Kit Juckes, strategist at Societe Generale, said in a research note on Wednesday.

"Weak oil prices will be a major factor behind default rates in 2016 and even if the latest rush of forecasts of oil reaching $25/20/10 (a barrel) aren't proven right, the damage has already been done," he added.

The strength of the U.S. dollar (Intercontinental Exchange US: .DXY) also remains a concern for traders and will likely feature heavily in this quarter's earnings reports. No major U.S. companies are due to post results on Wednesday, but Infosys (National Stock Exchange of India: INFY-IN), a major employer in the states, will report after the market closes.

In other stock news, General Electric (GE) announced plans to cut 6,500 jobs in Europe over the next two years on Wednesday.

At 2 p.m. ET, the Federal Reserve's Beige Book and the monthly budget will be released and may shed some light on the state of the economy and when the next interest rate hike may come.

In a Wednesday speech, Boston Fed President Eric Rosengren said global and U.S. economic growth may be slipping and force the Federal Reserve into a more gradual course of rate hikes than officials currently expect.

"While monetary policy should not overreact to short-term temporary fluctuations in financial markets, policy makers should take seriously the potential downside risk to their economic forecasts and manage those risks as we think about the appropriate path," Rosengren said.

Weekly crude inventories and the MBA mortgage index are also due on Wednesday.

U.S. Treasury prices fell on Wednesday ahead of a $21 billion auction in benchmark 10-year notes (U.S.:US10Y).

— Reuters contributed to this report.

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