* Wall St holds near record highs
* Corporate earnings, M&A underpin valuations
* Trump promises "phenomenal" tax reform, no details
* Banks weigh on European stocks, miners up on China
* Eyes on Trump-Abe meeting in Washington
By Vikram Subhedar
LONDON, Feb 10 (Reuters) - The dollar rose and U.S. stock futures held near record highs as investors cheered upbeat Chinese trade data and hopes of business-friendly tax cuts in the United States, although lingering concerns over political risks kept gains in check.
President Donald Trump said on Thursday that in coming weeks he would announce something "phenomenal" in terms of tax although he offered no further details.
Renewed speculation that Trump's economic policies will help boost economic growth and inflation pushed U.S. Treasury yields higher and lifted the dollar.
Strong Chinese trade numbers of Friday added to a sense that inflationary pressures could be stirring.
Evidence of Chinese growth lifted shares of commodity-related sectors, in particular blue chip mining, across Europe helping regional indexes inch higher back towards last month's peaks.
Futures on the S&P 500 were up about 0.1 percent. Wall Street's three main indexes notched record highs overnight.
European shares were off day's peaks weighed down by weakness in banking shares. They are still poised to close the week about 1 percent higher.
Healthy corporate results and the continued uptick in European dealmaking which is seeing its strongest start to the year in more than a decade helped underpin valuations.
Reckitt Benckiser has agreed to buy U.S. baby formula maker Mead Johnson Nutrition for $16.6 billion, giving the British consumer goods company a new product line and expanding its presence in developing markets.
Meanwhile, analyst sentiment on European earnings is the brightest it has been in 6 years while in the U.S. fourth quarter earnings are forecast to grow 8.5 percent, according to Thomson Reuters I/B/E/S.
"We've had Trump's comments on tax reform, the phone call with China and quite decent China trade data, so there is a risk-on mood again in markets," DZ Bank rates strategist Rene Albrecht said.
Broadly upbeat sentiment was evident in investment flows too with investors pumping $13 billion into bonds, $6 billion into equities and even $2 billion into gold, in the past week according to latest data from Bank of America Merrill Lynch and fund tracker EPFR.
On the political front, Trump seemed to change tack and said he would honour the longstanding "one China" policy during a phone call with China's leader, a major diplomatic boost for Beijing which brooks no criticism of its claim to neighbouring Taiwan.
Focus now shifts to a meeting later on Friday between Trump and Japan's Prime Minister Shinzo Abe in which Abe is expected to propose a new cabinet level framework for U.S.-Japan talks on trade, security and macroeconomic issues, including currencies.
The market focus will be watching for the results of discussions between Abe and Trump on the future of trade policy, the car industry, defence policy and monetary policy, analysts at Morgan Stanley, wrote in a note to clients.
The dollar was up 0.3 percent to a 10-day high against the yen and is poised to finish the week about 1 percent stronger against the Japanese currency.
The dollar index, which tracks the greenback against a basket of six major currencies, added 0.2 percent on the day to 100.8, on track to gain 0.8 percent for the week.
The week has seen heightened fears about euro zone political risks with French bond yields climbing to a 17-year high as fears about a strong showing for far-right leader Marine Le Pen ahead of a presidential election rattled markets.
Societe Generale, however, said the "Armageddon risk" ahead of the French elections is overdone.
In commodities, crude oil prices extended gains supported by strong Chinese crude imports and OPEC-led production cuts.
Brent crude futures, the international benchmark for oil prices, rose 1.5 percent to $56.48 a barrel.
U.S. West Texas Intermediate (WTI) crude futures were up 1.3 percent. (Additional reporting by Dhara Ranasinghe, Editing by Toby Chopra)