Australian shares to start lower ahead of RBA, inflation data
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The news: The Australian sharemarket is set to start lower after Wall Street ended mixed, and as local investors focus on the Reserve Bank’s decision and monthly inflation data this week.
The numbers: The Dow Jones index ended 0.09% higher, while the broader S&P 500 edged 0.19% lower and the tech-heavy Nasdaq lost 0.36%. In the local market, ASX 200 futures were down 68 points or 0.82% to 8,190 points at 7am AEST on Monday.
The context: US stocks were subdued for most of the session on Friday, as investors paused buying after a strong rally fuelled by an upsized interest-rate cut by the Federal Reserve.
Stocks briefly pared losses after comments from Fed Governor Christopher Waller increased expectations the US central bank will cut interest rates by 50 basis points at its November meeting, but fellow Governor Michelle Bowman maintained that a smaller Fed cut this week would have been preferred. Markets are fully pricing in a cut of at least 25 bps in November, with expectations for a cut of 50 bps given a 48.9% chance, according to CME's FedWatch Tool.
In the local market too, investor attention will turn to the RBA’s rate decision on Tuesday, with the central bank widely expected to keep the cash rate on hold at 4.35%, followed by the August inflation update on Wednesday.
The source: Reuters
