Australian shares are expected to open slightly lower as investors await key inflation following a weaker night on Wall Street.
Futures trading on the Australian Securities Exchange (ASX) indicates the main index will fall 0.1%, following the path of stock prices in New York where corporate earnings left investors disappointed and looking towards a United States rates decision.
At the time of writing, the benchmark S&P/ASX 200 September share price index (SPI) contract was trading seven points below the previous settlement at 8662.00 points.
Wall Street indices finished lower after some company results were worse than expected and pending a monetary policy statement from the Federal Reserve Board.
The Dow Jones Industrial Average dropped by 0.46%, the S&P 500 by 0.3% and the Nasdaq Composite by 0.4%.
Chief CommSec Economist Ryan Felsman said although UnitedHealth, Boeing and Merck results were disappointing, Australian investors more focused on June quarter consumer price index (CPI) data today for indications of the next interest rate move.
The figures will be issued by the Australian Bureau of Statistics at 11.30am AEST (1.30pm GMT) amid expectations that the Reserve Bank of Australia (RBA) will cut lower interest rates next month.
“Aussie shares are expected to open slightly on Wednesday, tracking a decline on Wall Street while local traders await key inflation data due later in a day for clues on the central bank’s interest rate trajectory,” Felsman said.
He did not see the CPI data preventing a rate cut, even if the annualised rate was above the midpoint of the RBA’s 2-3% target range, particularly as recent jobs data had been weak.
Felsman said although the SPI futures were pointing to a lower start, Australian stocks could be supported by commodity prices which were stronger overnight, with oil, gold and iron ore futures trading higher.
Australian shares had closed slightly higher on Tuesday with the S&P/ASX 200 adding 0.1%.
Apart from inflation data, investor interest will include the Rio Tinto (ASX: RIO) half-year results.
On the fixed interest markets, the Australian Government bond yield curve eased with 10-Year rates dropping 0.02% to 4.300% and two-year rates falling 0.15% to 3.361%.
