Australian shares are poised to open lower on Wednesday, tracking overnight weakness on Wall Street and ongoing volatility in oil markets as uncertainty persists around United States-Iran negotiations and the status of the Strait of Hormuz blockade.
By 9:30 am AEST (11:30 pm GMT), ASX 200 futures were down 63 points, or 0.7%, to 8,915 after earlier falling more than 90 points, signalling a softer start to Wednesday’s session.
The cautious tone follows comments from U.S. President Donald Trump, who said late in the U.S. session that he would extend the ceasefire with Iran while maintaining the naval blockade of Iranian ports.
Shortly after, Axios reported that Iran’s Supreme Leader, Mojtaba Khamenei, is expected to respond to the latest proposals to end hostilities on Wednesday, citing an Israeli source.
Overnight in the United States, major equity indices closed lower, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite each declining 0.6%.
On the U.S. monetary policy front, ANZ analysts noted that the confirmation hearing for Federal Reserve chair nominee Kevin Warsh delivered few surprises. “The confirmation hearing of Fed Chair nominee Kevin Warsh delivered few surprises, with Warsh largely echoing views outlined in his recent communications.
"He pledged his independence from political pressure. He argued that the Fed needs a new inflation framework, better data, a change in its communication approach by removing forward guidance as a policy tool and a gradual reduction in the balance sheet following a process of public consultation.
"It remains unclear when Warsh will be confirmed, given continued opposition from Senator Tillis until the Department of Justice probe into Chair Powell is dropped.”
In the previous session, the Australian sharemarket closed little changed, with the S&P/ASX 200 Index easing 3.9 points, or 0.04%, to 8,949.4, as weakness in the Energy sector weighed on the benchmark.
Investors will be monitoring a series of corporate updates on Wednesday, with major resource companies including BHP, South32 and Paladin Energy scheduled to report results.
On the bond markets, the Australian 10-year yield edged 0.04% lower to 4.96%, while the 2-year yield rose 0.3% to 4.636%.
