**ASX Set to Rise Amid Focus on RBA Meeting; Global Markets Await Economic Data**
*Based on analysis in the article by Sarah Turner, The Australian Financial Review, and supplemented by recent market commentary*
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Australian shares are poised for an upward move, as global investors keep a close eye on the Reserve Bank of Australia’s (RBA) upcoming policy decision. The market mood is shaped by mixed economic readings, cautious optimism surrounding the trajectory of global interest rates, and the anticipation of significant monetary policy outcomes.
**Key Highlights**
– The ASX 200 is expected to open higher, following gains abroad.
– The RBA’s monetary policy meeting is central to local market direction.
– International markets show stability, with Wall Street closing modestly higher.
– Investors weigh mixed US economic data and ongoing inflation concerns.
– The Australian dollar and other currency pairs reflect cautious optimism.
– Commodities, including iron ore, oil, and gold, play a vital role in shaping local market sentiment.
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**Australian Market Outlook**
The S&P/ASX 200 is forecast to start the day stronger, mirroring uplift on US and European bourses. Futures point to an advance, with local traders now shifting attention to the Reserve Bank’s June policy meeting. The RBA’s interest rate decision, to be announced later in the day, is the dominant theme for the Australian market.
Market participants generally expect the RBA to keep the cash rate steady at 4.35 percent. This status quo would mark the fourth successive meeting at which borrowing costs remain unchanged. However, traders will scrutinize the bank’s official statement for signals regarding future policy, given Australia’s stubbornly high inflation and robust labor market.
**Main Drivers for the ASX**
– **Monetary Policy:** The RBA’s approach to inflation will strongly influence the equity, bond, and currency markets.
– **Corporate Earnings:** Company updates, particularly from banks, resources, and consumer sectors, will be watched for guidance on earnings resilience.
– **Commodities Prices:** Movements in iron ore and energy prices affect the resource-heavy Australian index.
– **Offshore Leads:** Wall Street performance and developments across Asian markets provide direction for early trading.
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**Global Market Context**
Wall Street enjoyed modest gains overnight, with all major indices finishing in positive territory. This improved sentiment filters through to risk assets globally, including those in Australia.
The S&P 500 ended up 0.3 percent, marking another step towards reclaiming recent highs. The Dow Jones Industrial Average and Nasdaq also each posted slender advances. Investor optimism was tempered by unresolved questions about the Federal Reserve’s next move and mixed data releases.
Market sentiment has become more buoyant, but it remains subject to:
– Inflation readings and potential for monetary policy adjustments.
– Corporate earnings, especially from tech giants and financial firms.
– Signs of economic resilience or slowdown from key data points.
**International Economic Data in Focus**
Recent US data releases paint a complex picture of the
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