Australian shares were set to retreat on Wednesday, tracking a drop in their Wall Street peers, while local commodity stocks are expected to come under pressure as a rising dollar and US Treasury yields weigh on copper and gold prices.

The local share price index futures fell 0.9%, a 159.8-point discount to the underlying S&P/ASX 200 index close.

Australia shares set to open higher; NZ slips

New Zealand's benchmark S&P/NZX 50 index fell 0.5% in early trade to 12,756.16 points.