Australian shares set for modest start amid jitters on Wall Street

The news: The Australian sharemarket is set to start modestly higher after subdued trading on Wall Street, where investor nerves showed ahead of key economic data.

The numbers: The Dow Jones index was down 0.37%, the broader S&P 500 edged 0.03% lower while the tech-heavy Nasdaq gained 0.16%. In the local market, ASX 200 futures were 13 points or 0.17% higher at 7634 points at 7:00am AEDT on Wednesday.

The context: US stocks traded in a narrow range ahead of inflation and other economic data that could shed light on the possible timing of a Federal Reserve interest rate cut. The spotlight is on Thursday's January personal consumption expenditures price index (PCE), the Fed's preferred inflation gauge. If it resembles recent inflation readings on consumer and producer prices, it could compel the Fed to hold rates at current levels for longer than the market is anticipating. Expectations for a cut of at least 25 basis points by the Fed at its June meeting stand at 59.1%, down from the near certainty at the end of January.

In the local market, traders will keep an eye on the Reserve Bank of New Zealand’s rate decision later on Wednesday, as well as a handful of company earnings that include Flight Centre and Worley.