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The ASX has an all-time high in its sights after evidence of recovery in China’s economy helped Wall Street break fresh records.

SPI200 index futures rallied 19 points or 0.3 per cent to 6868, positioning the benchmark domestic index for a run at last month’s record close at 6864. BHP and Rio Tinto hit multi-month highs as oil and copper rallied.

The ASX 200 surged 110 points or 1.6 per cent yesterday, its biggest gain in seven months. Local investors were giddy on a cocktail of market-friendly news: the US and China announced a long-awaited trade deal; the prospects for further rate cuts were sharpened by a downbeat economic forecast from the federal government; and unexpectedly strong Chinese economic data suggested an improving demand outlook for Australian raw materials.

Wall Street celebrated confirmation from lead trade negotiator Robert Lighthizer over the weekend that the phase-one deal with China was “totally done”. The S&P 500 advanced 23 points or 0.71 per cent to a record close and a fourth straight gain. The Dow and Nasdaq set intraday records en route to closing gains of 0.36 per cent and 0.91 per cent, respectively.

Market heavyweight Apple provided the biggest lift to all three indices, rising 1.7 per cent after the US suspended a round of tariffs that were due to come into force on Sunday. The trade-sensitive tech sector hit a record, rising 0.9 per cent.

“It’s very much a trade-centric push for equities to move higher, capping a very strong year,” Peter Kenny, founder of Kenny’s Commentary and Strategic Board Solutions, told Reuters. The S&P 500 has put on more than 27 per cent this calendar year.

Concerns about the impact of the trade war on China’s economy were soothed by unexpectedly strong factory data. Industrial production improved 6.2 per cent last month from the same time last year, smashing forecasts of 5 per cent. growth. Retail sales also beat expectations, rising 8 per cent. Economists had expected growth of around 7.6 per cent. The figures added to optimism after the trade deal announcement. The Shanghai Composite put on 0.56 per cent despite weakness across other Asian markets.

BHP and Rio Tinto hit their highest levels since August in US trade. BHP’s US-listed stock added 1.9 per cent and its UK-listed stock 2.31 per cent. Rio Tinto gained 1.91 per cent in the US and 2.07 per cent in the UK. Iron ore stepped back from recent highs, the spot price at Tianjin easing 55 cents or 0.6 per cent to $US93.90 a dry ton.

Oil clung near a three-month peak. Brent crude futures settled 31 cents or 0.5 per cent ahead at $US65.53 a barrel.

Copper cracked $US6,2000 a tonne for the first time in seven months on Friday and traded at $US6,199 in final open outcry trading overnight on the London Metal Exchange, a gain of 1.1 per cent. Aluminium added 0.6 per cent, nickel 0.2 per cent and zinc 1.7 per cent. Lead slid 1.2 per cent and tin 0.3 per cent.

Gold settled little changed as weakness in the US dollar was offset by rising bond yields. February gold eased 70 cents or less than 0.1 per cent to $US1,480.50 an ounce.

The dollar rose almost a fifth of a cent to 68.86 US cents.

The session ahead brings October home loan figures and the minutes from the last Reserve Bank policy meeting at 11.30 am EST. Wall Street has housing starts, building permits and industrial production data on tap tonight.

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