Australian shares are set to open higher on Wednesday as investors weigh the Reserve Bank's cautious approach to further interest rate cuts, signaling a more measured path for monetary policy.

Positive sentiment was also boosted by US President Donald Trump's indication that he is considering eliminating capital gains taxes on home sales to support the housing market.

The S&P 500 and the Dow Jones Industrial Average rose 0.1% and 0.4% respectively, while the Nasdaq Composite fell 0.4%.

In the macroeconomy, the investors are eyeing the release of the Westpac-Melbourne Institute Leading Economic Index.

In corporate news, PointsBet Holdings (ASX:PBH) has rejected Betr Entertainment's (ASX:BBT) unsolicited all-scrip takeover offer, deeming it materially inferior to the cash offer from MIXI Australia, and urged shareholders to accept MIXI's AU$1.2 per share bid, according to a Wednesday filing with the Australian bourse.

Generation Development Group (ASX:GDG) recorded funds under management (FUM) of AU$4.4 billion at the end of the June quarter, up 33.5% from AU$3.29 billion a year earlier, according to a Wednesday filing with the Australian bourse.

Australia's benchmark index rose 0.1% or 9 points, to close at 8,677.20 on Tuesday.