ANZ index of commodity prices for December -2.2% m/m

  • prior -0.9%

NZD terms commodity prices down 3.0% m/m in December

ANZ note on the result today - largest fall in world and local prices since the current upward cycle in commodity prices began in early 2016

  • Combined with the recent surge in oil prices, such dynamics will temper New Zealand's terms of trade outlook over the first half of 2018.
  • We don't foresee a collapse, but expect around a 3½% moderation in the terms of trade from the September 2017 peak.
  • The subsequent improvement in dairy prices during January due to reduced New Zealand supply helps. But we believe further increases will now become more difficult.
  • For most other sectors, the price outlook is steadier at what are mostly historically high local returns. But the moderation in New Zealand's terms of trade is another indication of a likely more modest economic and employment growth picture in 2018

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ANZ Commodity Price Index is a monthly report that tracks the movement in the prices received for New Zealand's main export categories, in both world prices and New Zealand Dollars.