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Australian bonds tilt upward tracking U.S. Treasuries on divided September Fed meeting minutes

The Australian bonds tilted slightly on the upside tracking similar movement in the U.S. Treasuries after the Federal Reserve policymakers remain largely divided over the inflation outlook of the country and the path of rate hikes in the economy.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.83 percent, the yield on the 15-year note also slid 1 basis point to 3.11 percent and the yield on short-term 2-year traded flat at 1.95 percent by 03:05GMT.

The readout of the meeting, at which the Fed announced it would begin this month to reduce its large bond portfolio mostly amassed following the financial crisis and unanimously voted to hold rates steady, also showed that officials remained mostly sanguine about the economic impact of recent hurricanes.

"Many participants expressed concern that the low inflation readings this year might reflect... the influence of developments that could prove more persistent, and it was noted that some patience in removing policy accommodation while assessing trends in inflation was warranted," Reuters reported, citing the Fed’s meeting minutes.

Fed Chair Janet Yellen has repeatedly acknowledged since the meeting that there is rising uncertainty on the path of inflation, which has been retreating from the Fed’s 2 percent target rate over the past few months.

However, Yellen and a number of other key policymakers have made plain they expect to continue to gradually raise interest rates given the strength of the overall economy and continued tightening of the labor market.

Meanwhile, the S&P/ASX 200 index rose 0.38 percent to 5,765.50 by 03:10 GMT, while at 03:00GMT, the FxWirePro's Hourly AUD Strength Index remained neutral at 46.11 (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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