Investors can look forward to strong gains at the opening of the Australian sharemarket on Tuesday, with the benchmark index set to bounce off a seven-week low and rise more than 1% after a mixed performance on Wall Street overnight.
This is the outlook based on trading in the futures market, where the June contract of the ASX 200 index was last priced 92 points over the prior settlement at 8,615 points.
Assuming it is realised, such a start will help pare back some of the losses suffered on Monday when the ASX 200 closed 125.5 points or 1.5% lower at 8,505.3 points, which was its lowest finish since 1 April.
U.S. crude oil prices rose more than 3% overnight amid choppy trading after United States President Donald Trump paused another planned attack on Iran to allow for peace talks.
The Dow Jones Industrial Average gained 0.3%, but the S&P 500 slipped 0.1%, and the Nasdaq Composite dropped 0.5% on Monday (Tuesday AEST).
"It seems like the one issue that's been moving markets on a day-to-day basis is oil prices,” NFJ Investment Group portfolio manager Burns McKinney was quoted saying in a Reuters article.
He said the main variable was the blockade of oil transport channel, the Strait of Hormuz, which lifted oil prices and increased the risk of longer-term inflation.
News today includes minutes from the last Reserve Bank of Australia meeting, which should provide more details of the reasons for the lift in the official cash rate to 4.35%, and earnings reports from TechnologyOne (ASX: TNE) and Catapult (ASX: CAT).
In fixed interest markets, the Australian Government bond yield curve flattened slightly as two-year rates edged up by 0.02% to 4.729% and 10-year rates dropped by 0.08% to 5.065% at the time of writing.
