Australian shares seen unchanged after Wall Street losses
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The news: The Australian sharemarket is set to open little changed after losses on Wall Street amid lowered bets for big rate cuts and worries about the Middle East conflict.
The numbers: The Dow Jones index provisionally ended 0.95% lower, while the broader S&P 500 also lost 0.95% and the tech-heavy Nasdaq declined 1.18%. In the local market, ASX 200 futures were down just 4 points or 0.05% at 8,233 points at 7am AEDT on Tuesday.
The context: US stocks fell as Treasury yields rose after traders pulled back from bets for a 50-basis-point rate cut in November following Friday's stronger-than-expected jobs report and growing concerns on oil prices from the Middle East conflict. Investors also braced for another big hurricane, Milton, which is expected to hit the United States this week.
Traders are pricing in an 86% chance of a 25-basis-point cut and a roughly 14% chance the US central bank would not cut rates at all, according to the CME's FedWatch tool. The change in rate-cut expectations caused US Treasury yields to rally, with the yield on benchmark 10-year notes exceeding 4% for the first time in two months.
Besides next month's Fed meeting, investors are waiting for the Consumer Price Index inflation reading for September and the kick-off of third-quarter earnings season with reports from banks, both due this week.
The source: Reuters
