Australian shares to start flat as cautious sentiment prevails

The news: The Australian sharemarket is set to start the week little changed, tracking an up-and-down session on Wall Street on Friday as investors awaited clarity on the timing of potential interest rates cuts this year.

The numbers: The Dow Jones index rose 0.07% on Friday, the broader S&P 500 gained 0.18% while the tech-heavy Nasdaq was 0.07% ahead, but all three indices recorded a weekly decline. In the local market, ASX 200 futures were trading just 3 points or 0.04% lower at 7462 points at 7:00am AEDT on Monday.

The context: All three major US stock indices see-sawed on Friday, as investors absorbed the latest macroeconomic data which offered contrasting views on when interest rate cuts may begin. While robust jobs data showed US employers hired more workers than expected in December, dousing expectations of rapid easing of interest rates, activity in the services sector fell in December, pointing to a weaker economy and encouraging bets on rapid easing. Local investors will get a taste of things to come after the release of the monthly inflation report for December on Wednesday.