RBA commodity price index drifts back to earth

The Reserve Bank of Australia’s (RBA) index of commodity prices fell 1.6% in June in SDR (currency-weighted) terms, which follows May’s sharp 5.3% decline:

Index of commodity prices

Over the June quarter commodity prices fell 0.6% over the quarter but were 24.3% higher year-on-year in SDR terms.

The RBA’s commodity price index in SDR terms has historically closely tracked the nation’s terms-of-trade, which hit a record high in the March quarter:

Australia's terms-of-trade

Based on this data, Australia’s terms-of-trade should register a small decline when the Q2 national accounts are released in early September.

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