Australian shares set to drop after choppy Wall Street session
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The news: The Australian sharemarket is set to drop in early trading with investor sentiment weak after a choppy session overnight on Wall Street as well as Wednesday’s shock local inflation data.
The numbers: The Dow Jones index ended just 0.04% higher, while the broader S&P 500 gained 0.16% and the tech-heavy Nasdaq rose 0.49%. In the local market, ASX 200 futures were down 85 points or 1.09% to 7,689 points at 7:00am AEST on Thursday.
The context: US stock indices closed with modest gains after see-saw trade as investors stayed cautious ahead of a presidential debate and an inflation report closely watched by Federal Reserve policy makers.
Several economic data releases are due this week, leading to Friday's release of the personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge used to decide on the path of monetary policy.
The Fed has been projecting only one interest rate cut this year, in December. But investors see a 56.3% chance of a 25-basis point rate cut in September, and about two cuts by the year-end.
In the local market, investors will be focused on a late evening speech by RBA deputy governor Andrew Hauser after data on Wednesday showed inflation jumped to 4% in May from 3.6% in April, raising the prospects of a rate hike by the central bank.
The source: Reuters
