A positive lead from Wall Street and the fact that the geopolitical risks continue to ebb away has made for a solid finish to a broadly positive week for Asian equity markets. Consolidation appeared to be the name of the game in Japan with traders keen to lock in profits from recent days, but Hong Kong and Shanghai remained in favour with hopes of further stimulus measures from Beijing lending support here. Once again in recent days we’ve seen the Chinese macroeconomic data disappoint and although there’s an optimistic tone regarding the run into the year end, that big drop in housing sales is certainly cause for concern.
Wall Street is set to post some modest gains at the open although there’s a raft of economic readings due before the bell so this could well see sentiment shifting. Industrial production and PPI numbers could both provide some clues as to just how ready the US economy is for tighter monetary policy, whilst the University of Michigan confidence reading shortly after trade gets underway could ultimately set the tone for where US indices finish the week. Ahead of the open we’re calling the DOW up 16 at 16730 and the S&P up 3 at 1958.