Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

'Must-read, must-follow, one of the finest analysts in Australia' - Stephen Koukoulas, ex-Senior Economics Adviser to Prime Minister Gillard.

'One of Australia's brightest financial minds, a must-follow for accurate & in-depth analysis' - David Scutt, Business Insider.

'I've been investing 40 years yet still learn new concepts from Pete; one of Australia's finest young commentators' - Michael Yardney, Amazon #1 bestseller.

'The most knowledgeable person on Aussie real estate - loads of good data & charts, the most comprehensive analyst I follow in Australia' - Jonathan Tepper, Variant Perception, 2 x NYT bestseller.

'Superlative work' - Grant Williams, founder RealVision.

Wednesday, 9 September 2015

Commodities in context

Just following on from the previous post - and to put recent iron ore price gains in perspective - charted below is the Reserve Bank's commodities price index to August 2015.

Preliminary estimates showed that the index fell by 3.1 per cent in August (mainly due to oil and iron ore) in monthly average terms, after a horrible 3.6 per cent decline in July. 

Over the past year the index is 20.9 per cent lower in SDR terms, which is an ugly, ugly result.

As you can see the declines have been driven by the bulk commodities - iron ore, thermal coal and coking coal, denoted by the red line below.

The decline in the commodities index has been softened somewhat by the fall in the Aussie dollar, down by 7.4 per cent over the past year. 

The terms of trade continue to weigh heavy.