Asian markets may have put in a robust session, but despite reasons for optimism, the cheer isn’t carrying over to US futures. Jerome Powell laid out a cautious path over rate policy yesterday and his view was arguably a little more bullish than that of the underlying market, something which is adding a degree of downside pressure for stocks. US building starts also came in below expectations, again providing fresh cause for concern over the economic outlook given the significance this print has as a forward looking indicator. The imminent meeting between Donald Trump and Kim Jong Un along with hopes of progress here is also favouring Asian markets over US counterparts, whilst news of a deal with China being close and the accompanying inertia on Wall Street also suggests that Beijing may be the real victor here.

Economic data is picking up a little as the month end approaches and US factory orders for December could throw a surprise in here, given last week’s miss with the durable goods print. Again another shortfall would have the potential to ask more questions over the real state of the US economy and in turn put further pressure on stocks.

Ahead of the open we’re calling the DOW down 108 a 25950 and the S&P down 11 at 2783.

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