Australian shares are set to open higher Thursday, building on Wall Street's rally fueled by optimism over potential trade negotiations between the US and China.

On the macroeconomic front, Australia's payroll jobs report will be released at 11:30 am Sydney time.

Wall Street finished higher overnight, with the Nasdaq Composite jumping 2.5%, the S&P 500 advancing 1.7%, and the Dow Jones Industrial Average rising 1.1%.

Investors are hoping that the trade war between the US and China will soon ease after the White House appeared to be softening its rhetoric on Beijing.

Reuters reported Wednesday that the Trump administration was looking into lowering tariffs against Chinese goods, pending talks with Beijing, citing an unnamed source. On the same day, the Wall Street Journal reported that Chinese tariffs were likely to fall to 50% to 65% from the current rate of 145%. The paper cited an unnamed senior White House official.

In corporate news, Charter Hall Group (ASX:CHC) entered into talks to acquire the Waverley Gardens shopping center in Melbourne from Elanor Investors Group (ASX:ENN) for around AU$10 million, The Australian reported Wednesday.

Macquarie Group's (ASX:MQG) asset management unit, on behalf of Phoenix Group, injected 235 million pounds in long-term financing into Westminster City Council's acquisition of more than 350 temporary accommodation properties within the borough of Westminster, according to a Wednesday statement.

Australia's benchmark index rose 1.3%, or 103.80 points, to close at 7,920.50 on Wednesday.