Australian shares to start higher after gains on Wall Street

The news: The Australian sharemarket is poised to start higher, tracking gains on Wall Street where investors continue to bet on likely rate cuts by the Fed to start early next year.

The numbers: The Dow Jones index was trading 0.05% higher, while the broader S&P 500 gained 0.57%, and the tech-heavy Nasdaq added 0.73%. In the local market, ASX 200 futures were trading 17 points or 0.23% higher at 7457 points at 7.00am AEDT on Tuesday.

The context: US stocks advanced ahead of economic data later this week that could reinforce expectations of interest rate cuts from the Federal Reserve in the coming year. This includes a final revision on third-quarter GDP on Thursday, followed by a broad-ranging Personal Consumption Expenditures report on Friday, which will cover income growth, consumer spending, and crucially, inflation. Markets are pricing in a 63.4% likelihood of the central bank lowering its funds target rate by 25 basis points at its March monetary policy meeting. In the local market, investors will be focused on the minutes of the RBA’s latest board meeting at 11.30am AEDT.