Australian shares set to dip as investors await key data

The news: The Australian sharemarket is set to dip in early trading with local and overseas investors in cautious mode ahead of key data that could determine the path for interest rates.

The numbers: The Dow Jones index is down 0.54%, the broader S&P 500 lost 0.17% while the tech-heavy Nasdaq eased 0.14% as the benchmark 10-year US Treasury yield rose above 4% again. In the local market, ASX 200 futures were trading 12 points or 0.16% lower at 7481 points at 7:00am AEDT on Wednesday.

The context: All three major US indices slipped as expectations the Federal Reserve could begin cutting rates as soon as March have been slowly decreasing. Investors are bracing this week for more Treasury supply and inflation data through the consumer price index and producer price index, as well as the start of the earnings season. In the local market too, traders will be keenly eyeing inflation numbers for November set to be released later on Wednesday. Quarterly inflation data, due at the end of the month, is likely to be a key factor in determining whether the Reserve Bank pushes ahead with another rate hike or not.