What you need2know:

• SPI futures up 58 pts at 5369

• AUD at 87.81 US cents, 93.81 Japanese yen, 69.01 Euro cents and 54.47 British pence

• In late trade, S&P 500 +1.9%, Dow +1.2%, Nasdaq +2.3%

• In Europe, Euro Stoxx 50 +2.2%, FTSE +1.7%, CAC +2.3%, DAX +1.9%

• Spot gold up 0.2% to $US1249.17 an ounce

• Brent oil rises 0.9% to $US86.19 per barrel

• Iron ore adds 0.3% to $US81.83 per metric tonne

What’s on today

Australia consumer price index, Westpac-Melbourne Institute Leading Indexes of Economic Activity, Commonwealth Bank Business Sales Indicator for September, former ACCC chairman Graeme Samuel speaking at Australia-Israel Chamber of Commerce lunch; US consumer prices.

Stocks to watch

BHP Billiton quarterly production report, Origin Energy annual general meeting, Super Retail Group annual general meeting.

Deutsche Bank has a “buy” on QBE Insurance and a target price of $12.35 a share after its investor day.

RBC Capital Markets has a “sector perform” on Santos and dropped its price target from $16 a share to $15 a share.

Currencies

The euro fell sharply against the US dollar after Reuters reported the European Central Bank was looking at buying corporate bonds as soon as December in its efforts to revive the stagnating euro zone economy.

As for the $A, David de Ferranti, market analyst at FXCM says: “The primary threat to the high-yielding currency remains the prospect of a continued surge in volatility, which according to some measures is at its highest since February. While many Aussie carry trades may have already been unwound short positioning in the futures markets remains well off the extremes of last year. This suggests there is plenty of room in the short trade before it begins to look ‘crowded’."

Commodities

Brent crude oil ended up almost 1 per cent, helped by data showing stronger-than-expected China demand and some technical price recovery after weeks of almost uninterrupted selling. The International Energy Agency slashed its world oil demand growth forecast for next year. On Wall Street, investment bank Citigroup cut its forecast for Brent to $US92 and US crude to $US83 for the fourth quarter.

Gold rose to a six-week high, lifted by broad-based commodities gains and concerns over an economic slowdown in China. A sharp outflow in gold-backed exchange-traded funds and lacklustre Asian physical demand, however, indicate a vulnerable price outlook for bullion, analysts said.

Nickel closed at $US15,300 a tonne, down 0.5 per cent. "We remind readers that $US15,000/$US15,200 is a very important support area, as it was the old resistance area before the March 14 'break up' after a long lateral consolidation," broker Triland said in a note.

United States

US stocks rallied on Tuesday afternoon, with the S&P 500 on track for a fourth straight session of gains boosted by strong corporate results, including Apple's.

The S&P 500 has gained more than 6 per cent from its session low last Wednesday, when the benchmark was down nearly 10 percent from its intraday record. The index is on track to close above its 14-day moving average for the first time since September 24 and was also trading above its 200-day average.

Existing US home sales rose 2.4 per cent in September, above expectations, hitting their highest level in a year.

Europe

European stocks surged higher on Tuesday. “Shares in Europe took off today... thanks to better than expected growth in China and speculation the ECB is considering widening its asset purchase program to include corporate bonds in an effort to boost business lending,” said CMC Markets UK analyst Jasper Lawler.

Shares in French oil and gas giant Total finished the day 3.5 per cent higher at 44.42 euros, having initially dived following news of the accidental death of its chief executive Christophe de Margerie. The plane he was on crashed, and all on board killed, after hitting a snow plow while taking off in poor visibility near midnight from a Moscow airport.

The European Central Bank is considering buying corporate bonds on the secondary market and may decide on the matter as soon as December with a view to begin purchases early next year, several sources familiar with the situation told Reuters.

What happened yesterday

Australian shares were set to close lower on Tuesday, breaking a five-day winning streak, after a promising rally driven by the Chinese data petered out in the afternoon. But the market rallied in the last few minutes of trading.

The S&P/ASX 200 Index added 6 points, or 0.1 per cent, to 5325, while the All Ordinaries closed 5 points up at 5312.5.