Australian shares are set to continue climbing after a stronger finish in New York and ahead of the release of economic growth data on Wednesday which may show the Australian economy growing at its fastest rate in three years.
The ASX 200 index should open about 0.2% higher with the December share price index (SPI) futures contract quoted 15 points above the previous settlement at 8,607 points at the time of writing.
A positive signal was received from the United States, where share markets rose on Tuesday (Wednesday AEDT) as technology shares rebounded on expectations that the Federal Reserve would soon cut interest rates.
The Dow Jones Industrial Average added 0.4%, the S&P 500 put on 0.3% and the Nasdaq Composite gained 0.6% as the focus shifted to the Fed’s next move from rising bond yields and the bounce back in bitcoin amid a paucity of economic news.
"It's possible that both of those things are adding a little bit of volatility to the market at a time when there's kind of a catalyst vacuum until the Fed," Baird Investment Strategist Ross Mayfield was quoted in a Reuters story as saying.
News today includes the release of economic growth (GDP) data for the September quarter and an appearance by Reserve Bank of Australia (RBA) Governor Michele Bullock before the Senate Economics Legislation Committee.
Chief CommSec Economist Ryan Felsman said Commonwealth Bank economists expected the economy to have expanded 0.7% in the September quarter for an annual rate of 2.2%, the strongest growth since 2022.
However, GDP ranked below inflation and employment in importance to the RBA, which was not expected to change interest rates for the foreseeable future and, depending on data in the meantime, may raise them in late 2026, he said.
He said mining stocks were likely to continue outperforming on the back of higher iron ore prices, but this would be offset by falls in energy and gold stocks due to drops in their underlying commodity prices.
“So a mixed backdrop as far as commodities are concerned, but the SPI futures are pointing up as far as a small positive gain is concerned today, and we did have a positive lead from Wall Street overnight,” Felsman said.
The Australian sharemarket closed slightly higher on Tuesday as the S&P/ASX 200 rose 0.2% to 8,579.7 points.
In the fixed interest markets, yields on Australian Government bonds rose, with two-year rates gaining 0.26% to 3.879% and 10-year rates adding 0.24% to 4.631%.
