Australian shares set to track Wall Street gains
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The news: The Australian sharemarket is poised to open higher after Wall Street rose sharply on Friday as more data bolstered the case for rate cuts from the Federal Reserve.
The numbers: The Dow Jones index ended 1.18% higher, while the broader S&P 500 gained 1.26% and the tech-heavy Nasdaq added 1.99%. In the local market, ASX 200 futures were up 22 points or 0.29% at 7,666 points at 7:00am AEST on Monday.
The context: All three major US indices posted robust gains, capping a week in which markets were encouraged by Fed chair Jerome Powell's more dovish-than-expected statements.
On Friday, the Labor Department's employment report showed the US economy added fewer jobs than expected, while the unemployment rate ticked higher and wage growth unexpectedly cooled. It bolstered the case for rate cuts from the Federal Reserve while also providing evidence of US economic resilience, prompting investors to raise bets the Fed would implement its first rate reduction in September.
In the local market too, all eyes will be on the Reserve Bank’s two-day policy meeting starting on Monday, with economists expecting a more hawkish tone from the central bank on the outlook for interest rates.
The source: Reuters
