Australian shares are expected to begin trading on Wednesday, little changed from the previous close, despite record highs on Wall Street and a boost from higher commodity prices.
The S&P/ASX 200 share price index (SPI) September contract was trading just four points under the previous settlement at 8,803 points, at the time of writing.
The main United States stock indices finished at record highs on Tuesday (Wednesday AEST) as signs of a weak jobs market confirmed forecasts that the U.S. Federal Reserve Board would cut interest rates to shore up economic growth.
The S&P 500 rose 0.27%, the Dow Jones Industrial Average added 0.43% and the Nasdaq Composite Index jumped 0.37%.
Murphy & Sylvest Market Strategist Paul Nolte said recent revisions to payroll data, which indicated a weak labour market, would not discourage the Fed from cutting interest rates by 25 basis points.
"We don't know month by month and won't for a few more months yet, but it points out that labour is weak," he was quoted in a Reuters story as saying.
Chief CommSec Economist Ryan Felsman said commodity-related stocks on the ASX could rise today due to higher oil, gold and iron ore prices overnight, with a focus for some also on the announcement of the world’s second biggest mining merger.
Anglo American (LON: AAL) and Teck Resources (NYSE: TECK) have revealed plans to combine to create a group with a combined market capitalisation of more than $53 billion.
Felsman said markets were awaiting U.S. inflation data for more evidence about the economy, but markets were pricing in a 25 basis point cut by the Federal Reserve Board this month, with a larger reduction thought unlikely.
Whether the Australian market will end lower for a third consecutive day will depend on news flow, including the outcome of shareholding meetings hosted by Brickworks (ASX: BKW), Metcash (ASX: MTS) and Washington H. Soul Pattinson (ASX: SOL).
The S&P/ASX 200 Index had dropped 0.5% on Tuesday, finishing down for a second day in a row.
In fixed interest markets, Australian Government bond yields barely changed, with two year rates down by 0.03% to 3.407% and 10 year rates flat at 4.302%.
