Australian shares are poised for a weaker start to the week following a robust U.S. jobs report that dampened hopes for an imminent interest rate cut by the Federal Reserve.
S&P/ASX 200 futures dropped 71 points, or 0.9%, in U.S. trading, reflecting bearish sentiment.
On Saturday, the U.S. economy added 256,000 non-farm jobs in December, marking the highest monthly increase since March, while the unemployment rate fell to 4.1% according to the Bureau of Labour Statistics.
The strong labour market figures bolstered expectations that the Federal Reserve will pause further rate cuts when it meets at the end of January.
Wall Street reacted negatively, with the S&P 500 closing 1.5% lower on Friday (Saturday AEDT). The financial, real estate, and technology sectors led the declines, each shedding over 2%.
U.S. Treasury yields also spiked, driven by renewed concerns about inflation and rising fiscal deficits.
Meanwhile, the Australian dollar fell 1% last week, to trade at US$0.61468, its lowest level since the early pandemic days of 2020.
Ahead in the week, market participants will be monitoring Westpac's consumer confidence report on Tuesday, while the Australian Bureau of Statistics will publish its December jobs report on Thursday.
On the bond markets, Australian 10-year and 2-year yields stood at 4.609% and 3.932%, respectively.