Global commodity prices have risen by 26% since January 2016 and oil prices are at the highest level in over a year. We see commodity prices as likely to be past their trough.
The lift in commodity prices has significant implications for Australia. For inflation, the impact should be expected through a number of channels. The rise in oil prices should have a direct impact on inflation, by lifting petrol prices. There are also second round effects through the impact on transport and other energy costs.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
