RBA Rate Decision Looms as Aussie Shares Reach for New Heights

Australian shares are poised to reach new highs as futures point to a 0.4% rise at Monday's opening bell, building on last week's strong gains of 3.5%, its biggest increase in four months. This momentum follows Wall Street, where the S&P 500 closed at a record high due to strong company results and an unexpectedly weak US employment report.

The Reserve Bank of Australia's policy meeting on Tuesday takes centre stage, with economists predicting that the cash rate will remain at 4.35%, having been raised three times since February to control inflation. However, policymakers are likely to maintain firm warnings about price growth, repeating the risk of further tightening.

Economist David Robertson from Bendigo Bank is a dissenting voice, believing the next interest rate move is still upwards. Meanwhile, chief investment officer Emanuel Datt at Datt Capital warns that any language hinting at future rate increases would affect confidence.

A busy week of company earnings will also grab investor attention, with major financial institutions such as Commonwealth Bank and Telstra set to report their results.