The Australian government bonds jumped Thursday as investors poured into safe-haven assets post the unveiling of the United States tax reform by President Donald Trump on Wednesday. Also, investors are eyeing the Reserve Bank of Australia (RBA) Governor Philip Lowe’s speech, scheduled for today.
The yield on the benchmark 10-year Treasury note, which moves inversely to its price, plunged 2-1/2 basis points to 2.62 percent, the yield on 15-year note slumped nearly 2 basis points to 3.02 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at 1.68 percent by 04:40 GMT.
The tax plan outline released on Wednesday by US President Donald Trump would sharply slash business taxes and discount the rate on overseas corporate profits brought back into the United States. The proposed changes include a cut to the top tax rate on pass-through businesses to 15 percent from the current rate of up to 36.9 percent.
Australia’s headline inflation, released on Wednesday, rose 0.5 percent quarter-on-quarter in the first three months of 2017, according to the Australian Bureau of Statistics, matching the December quarter figure and a tad below expectations for a 0.6 percent gain. However, it rose to 2.1 percent, up from 1.5 percent in the December quarter and versus forecasts for a 2.2 percent rise, lifting the headline inflation up into the Reserve Bank of Australia’s (RBA) 2-3 percent target range for the first time since the September quarter of 2014.
Meanwhile, the ASX 200 index traded 0.16 percent up at 5,907.00 by 04:50GMT, while at 04:00GMT, the FxWirePro's Hourly AUD Strength Index remained highly bearish at -102.64 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex


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