Australian bonds trade tad lower ahead of Q2 CPI, RBA Governor Lowe’s speech

The Australian bonds traded slightly on the downside Tuesday as investors wait to watch the country’s consumer price-led inflation index (CPI) for the second-quarter of this year, scheduled to be released on July 26. Also, the Reserve Bank of Australia (RBA) Governor Philip Lowe’s speech, due on the same day will add further direction to the debt market.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1 basis point to 2.70 percent, the yield on 15-year note remained tad higher by 1/2 basis point at 2.99 percent and the yield on short-term 2-year traded nearly flat at 1.85 percent by 03:10 GMT.

ANZ-Roy Morgan Australian Consumer Confidence bounced 2.3 percent last week, following a 0.4 percent fall the previous week. The increase in confidence was driven primarily by an improvement in consumers’ views towards both current and future economic conditions.

Further, Australia's core inflation rate is seen to have stayed below the targeted rate for the sixth straight quarter through April-June, an indication interest rates in the country are at record-lows and are set to remain there in the coming months, reports said.

"We expect the Q2 CPI to confirm that inflationary pressures have stabilised, although we continue to see only a very gradual lift from here. Indeed, on our forecasts, core inflation is set to remain below 2 percent until late 2018," the report said, citing, Jo Masters, Senior Economist, ANZ Research.

Meanwhile, the ASX 200 index jumped 0.68 percent to 5,675.50 by 03:20GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 29.75 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest