Australian shares are poised to fall on Friday, tracking a souring global mood as renewed US-China trade tensions and fresh American sanctions weigh on investor sentiment.

A sharp drop in oil prices, driven by surprise US inventory data and plans for US-Russia talks on Ukraine, further weighed on investor sentiment.

Overnight, the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average fell 0.6%, 0.5%, and 0.7%, respectively.

In the macroeconomy, Australia's softening labor market, marked by a higher unemployment rate in September, underpins a good chance of an interest rate cut by the central bank in November, Westpac (ASX:WBC, NZE:WBC) said on Thursday.

In corporate news, Eroad (ASX:ERD, NZE:ERD) reported an impairment of up to NZ$150 million on intangible assets related to its North American operations, reflecting ongoing challenges in the region's telematics market, according to a Friday filing with the New Zealand and Australian bourses.

Lynas Rare Earths (ASX:LYC) and Iluka Resources (ASX:ILU) are in focus as Australian Prime Minister Anthony Albanese moves to strike a critical minerals deal with US President Donald Trump, with the US eyeing direct investment in Australian projects amid rising trade tensions with China.

Australia's benchmark index rose 0.9% or 77.5 points, to close at 9,068.40 on Thursday.