U.S. equity futures trade sharply higher amid upbeat action overseas. The S&P 500 futures hover 21 points above fair value after climbing steadily throughout the night. The overnight advance occurred as China's Shanghai Composite rebounded, climbing 5.8%, while encouraging comments from Eurozone officials have provided additional support. Specifically, European Council President Donald Tusk said he expects Greece to submit concrete, realistic reform proposals. Mr. Tusk continued, saying the proposals must be matched by a realistic offer from creditors on debt sustainability. Mr. Tusk is the latest official to signal a shift in favor of debt restructuring after the International Monetary Fund did the same last week.

Treasuries have retreated with the 10-yr yield higher by six basis points at 2.25%.

Weekly Initial Claims will be released at 8:30 ET (Briefing.com consensus 276K).

In U.S. corporate news of note:

• Alcoa (AA 10.61, +0.11): +1.1% after reporting a bottom-line miss on better than expected revenue. The company reaffirmed its global aluminum demand growth forecast of 6.0%. 
• Costco (COST 141.97, +2.07): +1.5% after reporting better than expected June same-store sales, excluding the negative impact from gasoline price deflation and foreign exchange.
• PepsiCo (PEP 98.15, +2.54): +2.7% after beating estimates and raising its earnings growth forecast. 
• Walgreens Boots Alliance (WBA 88.25, +2.34): +2.7% after beating bottom-line estimates on light revenue. The company raised its earnings guidance for fiscal 2015. 

Reviewing overnight developments:

• Asian markets ended higher. Japan's Nikkei +0.6%, Hong Kong's Hang Seng +3.7%, and China's Shanghai Composite +5.8% 
  • In economic data: 
    • China's June CPI 0.0% month-over-month (expected -0.1%; prior -0.2%); +1.4% year-over-year (consensus 1.3%; last 1.2%). Separately, PPI -4.8% year-over-year (consensus -4.5%; last -4.6%) 
    • Japan's May Core Machinery Orders +0.6% month-over-month (expected -5.0%; prior 3.8%); +19.3% year-over-year (consensus 16.3%; last 3.0%) 
    • Australia's June Employment Change +7,300 (consensus -5,000; prior 39,900) while the Unemployment Rate ticked up to 6.0% from 5.9% (consensus 6.1%) 
  • In news: 
    • The Bank of Korea held its key interest rate at 1.5%, as expected 
    • Officials in China continued introducing measures aimed at halting the stock market slide with reports indicating a special taskforce targeting "hostile short-sellers" will be established by China's Public Security Ministry and China Securities Regulatory Commission

• Major European indices trade higher across the board. UK's FTSE +1.3%, Germany's DAX +2.0%, and France's CAC +2.3%. Elsewhere, Italy's MIB +2.7% and Spain's IBEX +2.7% 
  • Economic data was limited: 
    • Germany's May Trade Balance EUR22.80 billion (expected EUR21.00 billion; prior EUR21.50 billion) as Imports +0.4% month-over-month (consensus 0.9%; last -0.8%) and Exports +1.7% month-over-month (expected -0.8%; last 1.6%) 
  • Among news of note: 
    • The Bank of England made no changes to its policy stance, keeping the key interest rate and the purchasing program unchanged at 0.5% and GBP375 billion, respectively