ASX to rise on Wall St gains, RBA rate hopes

The news: The Australian sharemarket is set to open higher after major US indices edged ahead on Friday, and on expectations the RBA will keep interest rates on hold this week.

The numbers: On Friday, the Dow Jones index rose 0.33%, the broader S&P 500 added 0.18% while the tech-heavy Nasdaq slipped 0.02% after data showed US unemployment rose to 3.8% in August while wage growth slowed. In the local market, ASX 200 futures were trading 31 points or 0.43% higher at 7274 points at 0700 AEST on Monday.

The context: Friday’s data added to recent macroeconomic evidence that the Federal Reserve is winning its battle against inflation, and firmed expectations the US central bank is near the end of its interest rate hiking cycle. Investors are making a similar bet in the Australian market, with RBA governor Philip Lowe expected to keep the cash rate on hold at his last meeting on Tuesday, a day ahead of second quarter GDP data that is likely to be weak.