• Euro zone government bond yields nudged up on Wednesday ahead of a keenly anticipated announcement on tax reform from U.S. President Donald Trump that could revive reflation bets.
A report on Tuesday from Reuters that ECB policymakers see scope for sending a small signal in June towards reducing monetary stimulus also weighed on bond market sentiment, with German Bund yields touching fresh one-month highs.
Later on Wednesday, Trump is expected to spell out tax reform proposals. According to media reports, these could include a slashing of the corporate tax rate.
The threat of a U.S. government shutdown this weekend also receded after Trump backed away from demanding Congress include funding for his planned border wall with Mexico in a spending bill.
"Trump is stealing the show today," said Martin van Vliet, senior fixed income strategist at ING. "The talk about his tax plans are keeping markets busy, so we see euro zone bonds moving with Treasuries."
• U.S. President Donald Trump planned to propose on Wednesday steep cuts in corporate taxes and repatriated offshore corporate profits as the administration seeks to regain momentum on economic policies.
• Trump has told aides to cut the income tax rate for public companies to 15 percent from 35 percent, an administration official said, according to a Reuters report.
Another official said Trump would propose a repatriation tax on offshore earnings of 10 percent, compared with the current 35 percent, the report said.
A senior Treasury staffer told CNBC that Treasury Secretary Steven Mnuchin and National Economic Director Gary Cohn are set to conduct a joint news conference around 1:30 p.m. ET on Wednesday from the White House Briefing Room.
• The U.S. military started moving parts of its controversial THAAD anti-missile defence system to a deployment site in South Korea on Wednesday amid high tensions over North Korea's missile and nuclear programmes.
• China on Wednesday launched its first domestically built aircraft carrier, which will join an existing one bought second-hand, amid rising tensions over North Korea and worries about Beijing's assertiveness in the South China Sea.
• Oil prices resumed their downward trend on Wednesday as data showed a rise in U.S. crude inventories and record supplies in the rest of the world cast doubt on OPEC's ability to cut supplies and tighten the market.
U.S. West Texas Intermediate (WTI) crude oil futures were trading down 13 cents, or 0.3 percent, at $49.43 per barrel at 0416 GMT, after gaining 0.7 percent in the previous session. WTI has fallen for seven of the past eight sessions.
Brent crude futures, the international benchmark for oil prices, were at $51.99 per barrel, down 11 cents, or 0.2 percent, from their last close. Brent is around 8.5 percent below its April peak.
• Traders said that a report late on Tuesday by the American Petroleum Institute (API) that U.S. crude oil inventories rose by 897,000 barrels in the week to April 21 to 532.5 million barrels had weighed on WTI.
Reference:Reuters, CNBC
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