The Australian sharemarket is poised for a cautious start on Monday as investors prepare for a fourth interest rate rise this year, amid fears the central bank will keep warning that it will do whatever it takes to beat high inflation, with two more increases potentially on the horizon.
Futures indicate the S&P/ASX 200 Index will open flat, or 3 points higher, after posting its fourth consecutive week of losses.
The index has shaved off 4.5 per cent in September, putting it on course for its worst month since March, when the war between Iran and the US pushed the benchmark almost 8 per cent lower.
The local sharemarket has now wiped out all of this year’s gains, lagging far behind Wall Street, where the artificial intelligence boom has sent US indices to fresh highs.
All three US benchmarks rose on Friday, buoyed by continued enthusiasm for the AI trade, falling oil prices and US bond yields.
Hopes for a truce between the US and Iran pushed oil prices 3 per cent lower to $US104, while 10-year Treasury yields – a key borrowing benchmark – slipped after touching multidecade highs on persistent inflation concerns.
Locally, all the attention will be on the Reserve Bank of Australia on Tuesday.
While economists and markets are all but certain of a quarter-percentage-point increase to the cash rate to a 15-year high of 4.6 per cent, the statement and media conference will be scrutinised for hints on the rate outlook.