Australian stocks set to slide ahead of RBA rate decision

The news: The Australian sharemarket is set to open sharply lower following a mixed session on Wall Street and ahead of a rate decision by the Reserve Bank.

The numbers: The Dow Jones index ended 0.22% lower, although the broader S&P 500 eked out gains of 0.01% and the tech-heavy Nasdaq added 0.67%. In the local market, ASX 200 futures were trading 96 points or 1.36% lower at 6968 points at 0700 AEST on Tuesday.

The context: The mixed results on Wall Street come as investors weigh the likelihood the US Federal Reserve will need to keep interest rates higher for longer, with one of the Fed governors, Michelle Bowman, indicating her support for another increase if upcoming data shows inflation is stalling. In the local market too, investors remain nervous ahead of Michele Bullock’s first meeting as RBA Governor. The central bank is expected to keep rates on hold this month, but is seen as increasingly likely to opt for an increase in November given the sticky inflation numbers.