ASX Futures Up 50 Points on US Bank Earnings, Soft CPI

Australian shares are set to open higher, with futures pointing to a 50-point gain at the bell. The catalyst came from Wall Street, where a batch of bumper bank earnings lifted sentiment. JPMorgan Chase and Wells Fargo both beat consensus estimates, driven by stronger net interest income and lower credit costs. The S&P 500 closed up 0.7%, its best session in two weeks.

Locally, the tailwind from the US was reinforced by a solid drop in consumer prices. The monthly CPI indicator fell to 3.4% in November, down from 3.6% in October and below the 3.5% forecast. The core measure, which strips out volatile items, eased to 3.9% from 4.1%. The data gives the Reserve Bank more room to hold rates steady at its February meeting, traders said.

Banks are expected to lead the advance, tracking their US peers. The big four – Commonwealth Bank, Westpac, NAB, and ANZ – all rose in overnight trading on the ASX 24. Mining stocks may lag, with iron ore futures slipping 0.8% in Singapore on demand concerns out of China. BHP and Rio Tinto are both down in pre-market indications.

The energy sector is mixed. Crude oil edged higher after the US Energy Information Administration reported a larger-than-expected draw in domestic inventories. Woodside and Santos are both called up about 0.5%. Gold was flat near $2,050 an ounce.

The ASX 200 closed at 7,540 on Wednesday. The RBA's next policy decision is Feb. 6.