Australian share prices are set to rise to new highs on Wednesday in the wake of a stronger night on Wall Street where inflation data raised expectations of lower interest rates.
This came in the wake of a further easing in monetary policy by the Reserve Bank of Australia (RBA) on Tuesday, which helped the Australian Securities Exchange’s (ASX) main benchmark to another record closing high.
ASX futures trading indicates the S&P/ASX 200 index will begin about 0.15% higher when the market opens at 10:00am AEST (12:00pm GMT Tuesday) on day when more company results are scheduled to be reported.
At the time of writing the S&P/ASX 200 September share price index (SPI) contract was trading 14 point above the previous settlement at 8,852 points.
United States stock indices closed higher on Tuesday (Wednesday AEST) with the S&P 500 and Nasdaq Composite at new peaks levels after monthly inflation data raised hopes of another interest rate cut.
The Dow Jones Industrial Average rose 1.10%, the S&P 500 added 1.13% and the Nasdaq put on 1.39% after the Labor Department's Bureau of Labor Statistics said the consumer price index (CPI) rose 0.2% in July.
But inflation results were mixed with underlying data rising the most in six months due to higher costs for air fares and tariff-sensitive goods like furniture.
"The CPI data is supportive for equities overall, getting some good news with the Fed looking more on track to cut in September and potentially more transitory inflation," Goldman Sachs Asset Management Co-head of Client Portfolio Management, Fundamental Equities Katherine Bordlemay was quoted in Reuters story as saying.
The Australian market set another record run on Tuesday after the RBA cut rates by 25 basis points to 3.6%, the lowest level in more than two years, with the S&P/ASX 200 Index rising 0.4% to 8,882.0.
The market will also be guided by the content and tone of corporate results out today including Commonwealth Bank of Australia (ASX:CBA), Treasury Wine Estates (ASX:TWE), AGL Energy (ASX:AGL), Insurance Australia Group (ASX:IAG) and Computershare (ASX:CPU).
In fixed interest markets, yields fell on Australian Government bonds with 10 year rates off by 0.19% to 4.274% and two year rates dropping 0.33% to 3.324%.