Australian shares poised for flat start after Wall Street stumble

The news: The Australian sharemarket is poised to start marginally higher ahead of a key earnings week after Wall Street closed lower on Friday with economic data crimping hopes for early rate cuts.

The numbers: The Dow Jones index ended 0.39% lower on Friday, while the broader S&P 500 gave up 0.49% and the tech-heavy Nasdaq lost 0.83%. In the local market, ASX 200 futures were trading just 8 points or 0.1% higher at 7607 points at 7:00am AEDT on Monday.

The context: US stocks fell on Friday after a hotter-than-expected producer prices report eroded hopes for imminent interest rate cuts by the Federal Reserve. A Labor Department report showed US producer prices increased more than expected in January, feeding fears inflation was picking up after months of cooling.

Earlier in the week, a hot consumer prices report sparked a selloff in equity markets. Treasury yields spiked after the report as traders added to bets the Fed may defer the first rate cut until after June. In the local market, the focus this week will be on earnings updates from major companies including BHP, Rio Tinto, Qantas and Woolworths as well as the RBA’s February meeting minutes due on Tuesday.