Australian shares are set to open lower on Tuesday, tracking modest losses on Wall Street as United States Treasury yields climbed and Brent crude oil prices rose above US$90 a barrel amid renewed tensions between the U.S. and Iran.
ASX 200 futures were down 22 points, or 0.2%, at 9,002, pointing to a weaker start for the local market.
On Wall Street overnight, U.S. benchmark averages weakened as a war-related jump in crude prices revived inflation concerns and increased expectations for tighter monetary policy.
The Dow Jones Industrial Average fell 0.7%, the S&P 500 declined 0.3%, and the Nasdaq Composite eased 0.1%.
"Investors are revisiting some of the comments that Warsh made at Jackson Hole as well and what that may mean for interest rates, what that may mean for inflation," Paul Nolte, senior wealth advisor & market strategist at Murphy & Sylvest in Elmhurst, Illinois was quoted as saying in a Reuters story.
"If they do not hike rates in September, I think you will see a dramatic reaction in the markets because it's been prepped now for quite some time that they're going to raise rates."
In Australia, the sharemarket closed slightly lower on Monday as selling across mining and technology stocks offset gains among heavyweight banks.
The S&P/ASX 200 Index fell 16.3 points, or 0.2%, to 9,076.0, despite seven of the 11 sectors finishing higher.
Ahead of today's session, local investors will be watching fresh building approvals and current account data for further clues on the health of the Australian economy.
On the bond markets, Australian 10-year and two-year government bond yields rose 0.4% and 0.1%, respectively, to 5.128% and 4.736%.
