Australian shares set to start higher amid investor optimism

The news: The Australian sharemarket is poised for early gains despite a mixed trading session on Wall Street overnight amid investor hopes that interest rates have peaked.

The numbers: The Dow Jones index is trading 0.23% higher, the broader S&P 500 gained 0.11%, while the tech-heavy Nasdaq was down 0.05% after a sharp rally in the previous session. In the local market, ASX 200 futures were trading 48 points or 0.65% higher at 7446 points at 7:00am AEDT on Friday.

The context: Investors on Wall Street took a breather a day after the Federal Reserve signalled the historic tightening of monetary policy was likely over and that borrowing costs would drop next year. Data showed US retail sales unexpectedly rose in November, further alleviating fears of a recession. In the local market, a lift in the unemployment rate on Thursday also bolstered hopes that interest rates have likely peaked.

What they said: "The market by any measure and any metric is overbought and has been overbought, and a consolidation or a pause has been expected, especially after yesterday's surge," Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina told Reuters.