Australian bonds ease losses after RBA maintains balanced view in September meeting minutes

The Australian bonds eased losses Tuesday after the Reserve Bank of Australia (RBA) maintained a balanced view of the economy in the September monetary policy meeting minutes, released early today. Investors will now be looking forward to a speech from Governor Philip Lowe, scheduled on September 21 by 05:10GMT.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.82 percent, the yield on the 15-year note climbed nearly 1 basis point to 3.11 percent and the yield on short-term 2-year also traded 1 basis point higher at 2.00 percent by 02:40GMT.

Australia’s central bank has turned more upbeat on the economic outlook led by an improving labor market, although it remained worried about rising household debt and a strong local dollar. Minutes of the RBA’s September meeting showed policy makers also doubted the strength in jobs would lead to a much-needed pick up in wages anytime soon.

Indeed, the RBA has forecast the AUD1.7 trillion economy would grow “above potential” at around 3 percent over the next couple of years. Board members further noted that the domestic currency has raced its highest in two years this month amid a broad decline in the U.S. dollar. A further rise in the currency could compress consumer prices and weigh on the outlook for economic growth and employment, it warned.

Meanwhile, the S&P/ASX 200 index rose 0.08 percent to 5,720.50 by 02:45 GMT, while at 02:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at -46.94 (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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