The Australian share market is set to dip on open, following losses on Wall Street and concerns about rising inflation in the US.
Key points:
- The ASX is expected to follow US markets and drop on Tuesday
- Wall Street suffered losses in Monday trade, with all three major indices finishing 0.7 per cent down
- The falls followed concerns about rising inflation in the US
At 7:00am AEST, ASX 200 futures were down 0.3 per cent.
The local benchmark also closed down on Monday.
“Commodity prices continued their rally, with WTI crude oil lifting above $US80/barrel,” ANZ analysts noted.
That is lifting inflation concerns and boosting the US currency.
“AUD/USD bucked the broad USD trend and is trading higher near 0.7350 amid gains in oil and base metal prices,” the analysts said.
“The more positive Australia US 10-year bond spread may also be supporting AUD/USD.
Overall, every major on Wall Street closed down, with all three closing around 0.7 per cent down. European markets also had choppy trade.
The bank’s analysts also expect that the easing of restrictions in Sydney while parts of New Zealand continue to be locked down would support the Australian dollar against its currency.
“Yesterday, the New Zealand government announced that Auckland will remain under Alert Level 3 restrictions for at least another week,” the ANZ analysts wrote.
“The stark contrast between relaxed restrictions in NSW and extended restrictions in NZ will support AUD/NZD in the near term.”
