RBA commodity index enters correction phase

By Leith van Onselen

The RBA has released its commodity price index for May, which registered a big 6.8% decline in SDR (currency weighted) terms – the key determinant of the terms-of-trade – and a 4.5% decline in Australian dollar terms:

Preliminary estimates for May indicate that the index decreased by 6.8 per cent (on a monthly average basis) in SDR terms, after decreasing by 4.4 per cent in April (revised). The decrease was led by declines in iron ore, coking coal and thermal coal prices. The rural subindex increased in the month, while the base metals subindex declined. In Australian dollar terms, the index decreased by 4.5 per cent in May.