Australian shares under pressure ahead of RBA decision

The news: The Australian sharemarket is likely to start lower with investors cautious ahead of the RBA board meeting, despite major US indices closing higher on Wall Street.

The numbers: The Dow Jones index ended 0.12% higher, while the broader S&P 500 gained 0.20%, and the tech-heavy Nasdaq added 0.31%. In the local market, ASX 200 futures were trading 11 points or 0.16% lower at 6993 points at 0800 AEDT on Tuesday.

The context: US stocks closed slightly higher overnight as investors awaited guidance from a host of Federal Reserve policymakers later in the week on the central bank's policy path. Expectations the Fed is likely done with rate hikes resulted in major indexes last week recording their biggest jumps in almost a year. In the local market, however, the focus will be entirely on the Reserve Bank’s rate decision at 2.30pm, with markets expecting a quarter point increase in the cash rate target to 4.35%.