Australian shares are set to reach a new record high at Friday’s open, buoyed by overnight gains on Wall Street and growing optimism that the Reserve Bank of Australia (RBA) will soon cut interest rates.
By 8 am AEDT (9 pm GMT) ASX futures were up by 36 points or 0.4%, ahead of the session.
In New York, United States equities posted minor gains overnight, though a sector-wide rally was overshadowed by weakness in technology stocks.
The market saw a surge after official data showed U.S. GDP grew by 2.3% in the fourth quarter of 2024.
The S&P 500 closed 0.5% higher but pared gains late in the session after President Donald Trump reiterated his plan to impose a 25% tariff on imports from Mexico and Canada starting 1 February.
Nvidia climbed higher but remains down 15.7% over the past week.
Australian stocks are expected to extend their rally, with bullish sentiment reinforced by NAB’s forecast that the RBA will deliver its first interest rate cut in February, aligning with expectations from other major banks.
According to the ASX's RBA Rate Tracker, expectations of a 25-basis point rate cut lifted to 95% on Thursday.
Overnight, the European Central Bank (ECB) cut its key rate to 2.75%, with markets pricing in further reductions towards 2% later this year.
Meanwhile, gold reached fresh all-time highs, rising 1.3% to $US2,798.43 an ounce, while Brent crude climbed 0.3% to $US77.08 a barrel, driven by Trump’s tariff announcement.
Among local companies, quarterly results are expected Friday from Origin Energy, Syrah Resources, ResMed, and Champion Iron.
On the bond markets, 10-year and 2-year rates were at 4.367% and 3.801%, respectively.
