The Reserve Bank of Australia (RBA) released its Index of Commodity Prices for the month of March, which continued its strong bull run.
Over the month of March, commodity prices rose another 1.6% in currency-weighted SDR terms, which followed the 3.1% rise in February.
Over the March quarter, the commodity price index surged by 12.5% in SDR terms, whereas they were up 28.2% over the year.
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The commodity price index is now tracking above the 2008 peak, which was the first phase of this century’s much vaunted mining boom.
In Australian dollar terms, the commodity price rose by 1.3% in March, by 9.0% over the quarter, and by 7.8% year-on-year, weighed down by the rising Australian dollar.
The RBA’s commodity price index in SDR terms has historically closely tracked the nation’s terms-of-trade, as illustrated clearly in the next chart:
Thus, the terms-of-trade should record a big lift when the Q1 national accounts are released in early June.
Effectively, Australia has received a pay rise on the goods that it exports, which augers well for company profits, national disposable income and federal budget finances.