Australian shares are set to reach a fresh high on Monday, but investors are preparing for a bumpy ride in a busy week of company earnings led by Commonwealth Bank and a possible warning on interest rates from the Reserve Bank of Australia.
Futures indicate the S&P/ASX 200 Index will rise 33 points, or 0.4 per cent, at the opening bell on Monday, extending a week of strong gains in which the index hit record highs.
The benchmark climbed 3.5 per cent last week, its biggest increase in four months.
This momentum follows Wall Street, where the S&P 500 closed at a record high to cap off a strong week. All three major indices posted their biggest weekly gains since April as strong company results eased worries about huge spending by artificial intelligence providers.
Confidence was further lifted by an unexpectedly weak US employment report. Payroll data showed a loss of 23,000 jobs against forecasts of an 80,000 gain, leading financial markets to retreat from expectations of an interest rate increase by the US Federal Reserve at its mid-September meeting.
Before the report, money markets were evenly divided on the prospects of higher borrowing costs. But after the data, the chance of a rate rise slipped to 40 per cent.
Investors will also watch US inflation figures on Wednesday for further signs on the direction of interest rates.
In Australia, attention centres on the Reserve Bank of Australia’s policy meeting on Tuesday, when it is widely expected to keep the cash rate at 4.35 per cent after raising it three times since February to control inflation.
Even so, economists warn that policymakers are likely to maintain firm warnings about price growth, repeating the risk of further tightening.
Source: https://www.afr.com/markets/equity-markets/asx-to-set-record-high-ahead-of-wild-earnings-rba-decision-20260807-p60mcv