Local data, muted Wall Street to weigh on Australian shares

The news: The Australian sharemarket is set to edge lower in early trading, with investors in a cautious mood amid the US Federal Reserve’s policy meeting and ahead of key local inflation data.

The numbers: The Dow Jones index is trading 0.28% higher, while the broader S&P 500 was down 0.06% and the tech-heavy Nasdaq 0.8% lower. In the local market, ASX 200 futures were trading 4 points or 0.05% lower at 7563 points at 7:00am AEDT on Wednesday.

The context: US stocks were subdued overnight with investors preoccupied by mixed corporate earnings, solid economic data and the Fed monetary policy meeting. A US Labor department report showed an unexpected rise in job openings, indicating the jobs market remains too solid for the Fed to consider cutting rate as soon as March. The Fed is set to hold its key rate with chair Jerome Powell's subsequent statements to be parsed for clues on the timing and number of rate cuts this year. In the local market too, traders are keenly watching for December quarter inflation data, due at 11:30am AEDT, which will be crucial in the Reserve Bank’s decision on rates at its first policy meeting next week.