Australian shares to start higher, tracking Wall Street gains
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The news: The Australian sharemarket is poised to open higher after gains on Wall Street on Friday as investors hoped for a bigger rate cut by the Federal Reserve this week.
The numbers: The Dow Jones index ended 0.72% higher, while the broader S&P 500 gained 0.54% and the tech-heavy Nasdaq added 0.65%. In the local market, ASX 200 futures were up 16 points or 0.19% at 8,116 points at 7am AEST on Monday.
The context: US stocks closed higher on Friday as investors honed in on the chance of a bigger interest rate cut after former New York Fed President Bill Dudley said there was a strong case for a 50 basis point interest rate cut.
Bets on the size of the Fed's cut have been volatile and were roughly even by late Friday. Expectations for a 50 basis point cut jumped to 49%, according to CME's FedWatch Tool, which showed a 51% probability for a 25 basis point cut.
Separately, on Friday, a survey showed US consumer sentiment improved in September as inflation subsided, though Americans remained cautious ahead of the November presidential election.
Rate decisions by the Bank of England and the Bank of Japan, as well as local August jobs data, are other key events to watch this week.
The source: Reuters
