Australian shares are set to open modestly higher on Tuesday, with futures pointing to gains despite a softer lead from Wall Street, as investors continue to monitor escalating geopolitical tensions and a busy global data calendar.
ASX 200 futures were up 48 points, or 0.5%, to 9,023 as of 9:45 am AEST (11:45 pm GMT).
The anticipated rise follows a subdued session in the United States, where major indices edged lower amid ongoing uncertainty surrounding the U.S. conflict with Iran.
Overnight, the Dow Jones Industrial Average finished virtually unchanged, slipping 0.01%, while the S&P 500 declined 0.2% and the Nasdaq Composite lost 0.3%.
Investor focus is turning to upcoming economic data releases, particularly indicators that may shed light on the resilience of global growth and inflation trends.
Analysts at ANZ said, "Preliminary April global PMI data will be released later this week. March retail sales data are also released in the U.S. tomorrow, providing the first ‘hard data’ on how the U.S. consumer is responding to the energy price shock.
"Neither looks set to challenge the ‘wait and see’ approach of major central banks. March CPI inflation data across major economies released thus far has shown a sharp increase in headline inflation, but no evidence of transmission of higher energy prices to underlying inflation.
"March PMI data had shown a surge in input costs, but selling prices generally remained well behaved, indicating that firm margin compression is doing the heavy lifting in adjusting to the input cost shock.
"Demand indicators have generally shown resilience in activity thus far as well, though forward indicators have pointed to downside risks to growth. April PMIs will be closely watched for further weakness in demand.
"We think the sum of data aligns with a cautious, data-dependent approach to policymaking ahead of next week’s major central bank meetings."
Economists at Westpac Group highlighted the ongoing risks stemming from the standoff.
"The Strait of Hormuz remains closed, with both the U.S. and Iran appearing increasingly frustrated by the lack of progress in peace talks.
"With the current ceasefire due to expire on Wednesday evening Washington time, President Trump indicated he is unlikely to extend the two week truce, having earlier threatened to target Iranian energy and bridge infrastructure should negotiations fail.
"Reports suggest the U.S. and Iran are now increasingly likely to meet in Islamabad for further talks, after Iranian officials had previously stated there were no “clear prospects” for an agreement, citing the U.S. naval blockade as a violation of the ceasefire."
On the domestic front, the S&P/ASX 200 edged 0.1% higher in the previous session.
In fixed income markets, Australian government bond yields were mixed. The 10-year yield eased 0.4% to 4.956%, while the 2-year yield rose 0.5% to 4.63%.
