The Australian sharemarket is expected to open lower ahead of the Reserve Bank of Australia’s meeting this afternoon, with the bank set to hold cash rates steady.
ASX 200 futures declined by 0.1% to 8,620 points. The ASX 200 also slipped yesterday, dropping 0.1% to close at 8,624.4.
The RBA is projected to maintain cash rates at 3.6% today. Its decision will be released at 2:30 pm (AEDT), with RBA Governor Michele Bullock speaking at 3:30 pm.
Markets are widely predicting the RBA will hike rates in 2026, however. “The market has come to the conclusion that the reserve bank won’t be cutting rates any further,” said Commonwealth Bank head of interest rates strategy Adam Donaldson.
“Basically, from February onwards, the market is starting to price some risk that rates will go up.”
United States markets dipped yesterday, with the S&P 500 ending the day 0.4% lower, the Nasdaq Composite down 0.1%, and the Dow Jones Industrial Average down 0.5%.
The U.S. Federal Reserve’s final interest rate decision of 2025 is also due on Wednesday (Thursday AEDT). Markets overwhelmingly expect a 0.25% rate cut, according to CME Fedwatch, following cuts in September and October.
The Fed will have a lack of economic data to consider ahead of its meeting, as the 43-day government shutdown in October and November suspended data releases.
November’s official labour market data is delayed until 16 December. Private employers cut 32,000 jobs last month, according to an ADP report.
Additionally, local investors will be monitoring the release of National Australia Bank's monthly business confidence survey.
On the bond markets, 10-year yields ticked up 0.1% to multi-year highs of 4.737%, while 2-year rates were steady at 4.003%.
