Australian stocks are expected to follow the lead set in the United States by opening higher today but attention will be on inflation numbers due for release this morning.
Futures trading indicated a stronger start with the S&P/ASX 200 March share price index (SPI) contract quoted 36 points or 0.43% higher at 8,401.00 at 9 am AEDT (10 pm GMT).
The catalyst was a positive session on Wall Street where the Nasdaq Composite rose 2%, the S&P 500 1% and the Dow Jones Industrial Average 0.3% as stocks rebounded from losses caused by worries about Chinese artificial intelligence (AI) company DeepSeek.
DeepSeek has developed at low cost a free, open-source large language model, raising concerns about the future competitiveness of U.S. AI investments and companies like chip maker Nvidia.
Chief CommSec Economist Ryan Felsman said the S&P/ASX 200 was expected to open higher on the back of the performance in the United States where technology stocks rebounded from the sharp slide on Tuesday.
“Broadly our market should be up but everything will hinge on the CPI (consumer price index) for the December quarter,” he said.
“The market is pricing in an 80% chance of the Reserve Bank of Australia cutting rates in February.”
The CPI announcement will be made by the Australian Bureau of Statistics at 11:30 am AEDT (12:30 pm GMT).
The consensus forecast is for ‘trimmed mean’ (underlying) inflation of 0.6% in the quarter, making an annualised rate of 3.3%, compared with 0.8% and 3.5% respectively in the September quarter, but CommSec is forecasting 0.5% and 3.2%.
Felsman said Australian energy, gold and copper producers should trade higher as a result of increases in the prices of their commodities overnight but iron ore was flat in the absence of Chinese output due to the Chinese New Year holiday.
On fixed interest markets, yields on Australian Treasury bonds strengthened with 10-year paper rising 0.27% to 4.415% and two-year paper gaining 0.26% to 3.864%.
