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Aussie shares are primed for fresh highs after trade worries ebbed overnight.

ASX SPI200 index futures rallied 28 points or 0.4 per cent to 6900, bolstered by gains in iron ore miners in UK trade and on-going optimism about the domestic rate outlook. The rise positioned the local market for a possible sixth day of gains.

Wall Street closed for Thanksgiving overnight, leaving local index traders to parse European shares and commodity markets for today’s leads.

Global market sentiment was weak at the end of yesterday’s Australian session as China threatened retaliation after US President Donald Trump signed into law two bills supporting Hong Kong protesters. However, the market mood improved overnight as traders opted to wait and see whether China’s “firm counter measures” will include further delays to the long-awaited phase-one trade deal with the US.

“The market is reacting in a cautiously positive way to the fact that we don’t have any details of retaliation,” Ken Odeluga, a market analyst at City Index in the UK, told Reuters. “I think we’ll know more in the coming days and the market is keeping its powder dry for that.”

European stocks opened weak, then pared losses as economic data beat expectations. The pan-European Stoxx 600 index finished just 0.14 per cent lower. An index of economic sentiment in the euro-zone rebounded as services activity picked up.

Asian shares softened yesterday at the prospect of a tougher Chinese stance in trade talks. The Shanghai Composite lost 0.47 per cent and Hong Kong’s Hang Seng 0.22 per cent. Australia rode out the down-pressure, hitting an all-time high as soft business spending figures added to the case for further rate cuts next year. The ASX 200 advanced 13 points or 0.2 per cent to a second straight record close.

BHP and Rio Tinto hit multi-month highs here yesterday and may have more to give after iron ore swung higher. BHP’s UK-listed stock rose 1.02 per cent overnight and Rio Tinto put on 0.72 per cent. The spot iron ore price rose 75 cents or 0.9 per cent to $US87.75 a dry ton, its first gain in three sessions.

Oil initially slumped at the prospect of weaker demand if trade talks hit the rocks, but pared losses with European stocks . Brent crude was lately off 14 cents or 0.22 per cent at $US63.92 a barrel after earlier trading more than 1 per cent in the red.

Nickel sagged to a four-month low as a possible trade-deal delay weighed on industrial metals. The metal used in stainless steel closed 2.1 per cent weaker at $US14,010 a tonne on the London Metal Exchange after trading down to $US13,930. Copper slipped 0.9 per cent, aluminium 0.7 per cent and zinc 0.8 per cent. Lead was flat. Tin edged up 0.1 per cent.

Gold marked time as investors waited to assess the impact of the latest trade friction. Spot gold edged up 0.1 per cent to $US1,455.37 an ounce, according to Reuters.  

The dollar retreated a tenth of a cent to 67.68 US cents.

Likely a slow day ahead, with trading volumes much reduced by the absence of American participation. (Yesterday’s ASX trading volume was the third lowest this month.) Domestic house sales and private-sector credit figures are due, but are unlikely to have a major impact on the market mood. Wall Street re-opens tonight for a few hours, but the economic calendar is empty.

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