Markets Live: ASX set for modest open

9:57am

Commodities have performed well overnight with oil, aluminium and nickel all moving up.

US Energy Information Administration (EIA) have lowered their US oil forecasts for this year while also upgrading the output forecasts for next year.

CBA is sceptical of the EIA's forecasts however, saying that limited infrastructure in the Permian Basin could constrain production.

CBA expect that supply growth will no longer outpace demand this year. It's expecting Brent oil prices to average $US65 a barrel in 2018, dropping to $US61 a barrel in 2019.

China's steel demand in downstream markets has picked up, helping to push iron ore prices above $US65 a tonne.

Aluminium is up 2.4 per cent at $US2,206 a tonne and nickel is trading up 2 per cent at $US13,652 a tonne.

9:40am

Why don't we take a look at what we can expect from the market this morning.

Australian stock futures are pointing to a modest gain in early trading following a rally on Wall Street.

Oil, base metals and iron ore were all up overnight, helping the US listed shares of BHP Billiton and Rio Tinto rise above 4 per cent.

Wall Street's three major benchmarks all closed up 1.7 per cent or higher, with both the US and China signalling the end of trade tensions.

China's President Xi Jinping offered a constructive trade message during a speech at the Boao Forum and US President Trump responded positively on Twitter.

The Australian dollar enjoyed strong growth overnight. At the close yesterday, it was sitting at US77.35¢ but since risen to US77.67¢.

Commodity prices are also up, signalling a positive day of trade ahead for the resource sector.

9:19am

Here are the overnight market highlights this morning:

SPI futures up 2 points to 5841 at about 7.40am AEST

AUD +0.8% to 77.59 US cents

On Wall St: Dow +1.8%, S&P 500 +1.7%, Nasdaq +2.1%

In New York, BHP +4.8% Rio +4.4%

In Europe: Stoxx 50 +0.7%, FTSE +1%, CAC +0.8%, DAX +1.1%

Spot gold +0.4% to $US1341.26 at 1.40pm New York time

Brent crude +3.6% to $US71.14 a barrel at 4.10pm New York time

US oil +3.7% to $US65.74 a barrel at 4.10pm New York time

Iron ore +2.1% to $US65.30 a tonne

Dalian iron ore +1.8% to 459 yuan

LME aluminium +4.2% to $US2229 a tonne

LME copper +1.7% to $US6945 a tonne

10-year bond yield: US 2.80%; Germany 0.51%; Australia 2.70%

9:02am

SPONSORED POST: Chinese President Xi Jinping has offered a message of 'make trade, not a trade war', writes David Song.

The tone taken was one of open trade borders, which would help to support China's trade surplus further as Xi vowed to lower import tariffs on vehicles and open sectors from shipping to aviation and finance to increase foreign investment, which helped to boost risk sentiment and helped global equity markets rise across the board.