Australian shares to rise as US rate cut hopes firm
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The news: The Australian sharemarket is set to open higher, despite a mixed session on Wall Street, after softer-than-expected inflation data raised hopes for a US interest rate cut in September.
The numbers: The Dow Jones index ended 0.08% higher, while the broader S&P 500 declined 0.88% and the tech-heavy Nasdaq tumbled 1.95%. In the local market, ASX 200 futures were up 44 points or 0.55% to 7,913 points at 7:00am AEST on Friday.
The context: The S&P 500 and the Nasdaq ended lower as investors sold off Nvidia, Apple and Tesla and rotated into smaller companies on rising bets the Federal Reserve will cut rates in September.
That came after a Labor Department report showed US consumer prices fell unexpectedly in June and the annual increase was the smallest in a year. Interest rates futures suggest traders now see an over 90% chance the Fed will cut rates by its September meeting, up from about 74% on Wednesday.
Investors are awaiting US producer price index data on Friday for insights into the inflation trajectory, along with second-quarter earnings from big banks.
The source: Reuters
