Australian shares set to track gains on Wall Street

The news: The Australian sharemarket is set to open higher, tracking overnight gains on Wall Street where fresh data underscored expectations of a rate cut as early as September.

The numbers: The Dow Jones index ended 1.85% higher to notch its biggest daily gain in more than a year, while the broader S&P 500 rose 0.64% and the tech-heavy Nasdaq added 0.20%. In the local market, ASX 200 futures were up 55 points or 0.69% to 8,035 points at 7.00am AEST on Wednesday.

The context: All three major US stock indexes rose as economically sensitive small caps and value stocks extended their rally after US retail sales data supported the view that the Federal Reserve is approaching its easing cycle. The stronger-than-expected retail sales provided reassurance that consumer spending, which accounts for about 70% of the US economy, has stayed resilient despite restrictive monetary policy, and eased fears that high interest rates could tip the economy into recession.

In the local market, mining giant BHP will release its quarterly operational review.