Australian shares are set to open 1.4 per cent higher on Monday thanks to a broad rally on Wall Street amid hopes the Fed will soon slow the pace of tightening.
, as investors grow increasingly optimistic that the Federal Reserve might indicate this week that it is preparing to slow the pace of monetary tightening.
As of Friday, futures markets placed a 22 per cent probability on the RBA lifting the cash rate to 3.1 per cent, with an implied peak of 3.9 per cent.P/ASX 200 is headed for a 1.4 per cent advance at the open of trading on Monday, tracking a strong lead from the US where Apple bucked the trend of a largely dismal earnings season for Wall Street’s tech giants by beating revenue and profit estimates.
“But will there be ‘buy the rumour and sell the news’ trades if the Fed does meet expectations to soften its hawkish tone? Or the sell-off may resume if the Fed keeps its aggressive tightening stance.” Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.6 per cent last month, the Commerce Department said.Speculation that the Fed will slow its aggressive tightening at its December meeting has grown after thelast week with a smaller-than-expected 0.5 percentage point interest rate increase.