The S&P 500 is up 0.3% and so is the Dow Jones. The Stoxx Europe 600 and the U.K.'s FTSE 100 are both up 1% and Hong Kong's Hang Seng Index rose 1.3%.

This comes after the People's Bank of China announced that it was lowering lowered the amount of reserves banks need to keep on hold at the central bank. The move is expected to boost lending in the Asian nation. It also signals that Beijing is determined to boost economic growth this year.

This comes as PMI data shows that activity in Chinese factories slowed slightly in December but is still growing.

Indices are also lifted by investors’ optimism that trade relations between the US and China keep improving, with Trump announcing that he would sign the phase-one trade deal with China on January 15. The American president said he would go to Beijing "at a later date" to launch the next stage of the talks.   

Meanwhile, Markit's purchasing managers index figures for December in the eurozone beat analyst expectations, but confirmed the contraction of activity in Germany and the euro area.

Later today, we will have December figures on U.S. manufacturing activity and the Labor Department will release weekly initial jobless claims.