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US stock futures rally after Trump trade remark; UK banks surge on Brexit hopes

Trump says trade talks "going very well."

➤ Pound holds onto gains over Brexit hopes; RBS shares surge more than 10%

Oil tops $60.00 per barrel after attack on Iran tanker.

Wall Street futures rallied amid signs of optimism in the ongoing U.S.-China trade talks, and sterling held onto its gains as hopes for a Brexit breakthrough grew.

S&P 500 and Nasdaq 100 futures rose 0.9% and 1.1%, respectively, around 6:30 a.m. ET. U.S. stocks closed yesterday's session higher.

U.S. President Donald Trump said trade talks with China were "going really well" and that he was set to meet with Chinese Vice Premier Liu He later today. Both countries resumed high-level discussions yesterday amid uncertainty whether the two camps will be able to reach a breakthrough.

To affirm a temporary trade truce, Trump will need to suspend or cancel the tariffs set to be imposed on Chinese goods Oct. 15 and Dec. 15, DBS' Philip Wee and Duncan Tan wrote in a note.

In Europe, the FTSE 100 rose 0.3%, as Royal Bank of Scotland Group PLC's and Barclays PLC's shares soared close to or more than 10% amid Brexit optimism. Barclays PLC gained more than 6% and HSBC Holdings PLC gained 2.4%.

U.K. Prime Minister Boris Johnson and Irish Prime Minister Leo Varadkar said a "pathway" to a potential Brexit deal was in sight.

The Irish leader appears to have dramatically shifted from sounding "very downbeat" on the prospects of a deal previously, implying significant progress in talks between the two sides, wrote Derek Halpenny, MUFG's head of research, global markets EMEA and international securities, and Fritz Louw, currency analyst.

EU Brexit negotiator Michel Barnier and his U.K. counterpart, Stephen Barclay, had a "constructive" meeting.

However, this optimism could be short-lived given that a potential deal needs to be approved by the EU and U.K. lawmakers, said Michael Hewson, chief market analyst at CMC Market (UK).

"In short this pathway to a deal could well be a road to nowhere, we shall see!" Hewson added.

France's CAC 40 jumped 1.2%. German's DAX index advanced nearly 2%, amid a 7.6% jump in SAP SE after the company reported double-digit growth in preliminary third-quarter adjusted profit. SAP CEO Bill McDermott will step down from his post.

Asian bourses closed higher, with the Shanghai SE Composite rising 0.9%, Japan's Nikkei 225 up 1.2% and Hong Kong's Hang Seng climbing 2.3%.

In currencies, the British pound gained 0.8% versus the dollar. Varadkar's stance leaves room for the pound to gain further, according to the MUFG note.

The euro was up 0.2% versus the dollar after the European Central Bank's September policy meeting minutes showed divisions among rate-setters regarding key parts of the recently announced stimulus package.

The Japanese yen declined 0.3% against the U.S. currency. The dollar index was down 0.2%.

Among commodities, Brent crude oil climbed 1.6% to $60.06 per barrel on the ICE Futures Exchange as two missiles reportedly hit an Iranian oil tanker in the Red Sea. Fears of renewed tensions in the Middle East come as OPEC and its allies weighed further output curbs ahead of its meeting in December.

Gold rose 0.2%.

In bond markets, the yield on 10-year Treasurys was up 1 basis point to 1.684%.

More from S&P Global Market Intelligence:

Fed finalizes overhaul of rules for large banks

Margin pressure threatens to crunch earnings in Q3 reports for US banks

North Carolina loses more than 1% of total branches in September

Wells Fargo top debt underwriter for utilities through Q3'19

The day ahead:

8 a.m. ET — U.S. Fed's Neel Kashkari speaks

8:30 a.m. ET — U.S. import and export prices

8:30 a.m. ET — Canada labor force survey

10 a.m. ET — University of Michigan's U.S. consumer sentiment index (Econoday consensus: 92.0)

1 p.m. ET — U.S. Baker-Hughes rig count

1:15 p.m. ET — U.S. Fed's Eric Rosengren speaks

3 p.m. ET — U.S. Fed's Robert Kaplan speaks