The Reserve Bank released its Index of Commodity Prices for the month of April yesterday, which showed a preliminary rise of 2.0 per cent on a monthly average basis (SDR) terms, following a very strong revised gain of +6.3 per cent in March.
The monthly increase in April was driven by rebounding iron ore and coking coal prices, which helped to more than offset a decline in LNG prices.
The iron ore spot price is now up by around 50 per cent in 2016 year-to-date.
The Reserve Bank's Index of Commodity Prices is thus 10.3 per cent higher than it was in January.
In Aussie dollar terms the ride should theoretically be a bit smoother as the currency adjusts, though the index in AUD terms is still down by 7.0 per cent from one year ago.
It's early days in May, of course, but it looks as though the rally could be sustained further for a fourth month.
A combination of stimulus and speculation in China has helped to reboot the iron price, and to a lesser extent that of coking coal, while the oil price has rebounded very strongly since the beginning of the year (LNG exports are largely contracted to Asian customers, and are linked to the price of oil).
Gold, which as the below chart shows is Australia's fifth most significant export commodity, saw its spot price touch a 15 month high of US$1,300/oz yesterday.
The copper spot price has also rebounded by around 15 per cent since a January low.
Rates on hold
At 2.30pm today, the Reserve Bank will announce its interest rate decision for May.
Markets have been excitedly pricing a cut following surprisingly soft inflation figures, but the above figures add further to the weight of evidence that rates should be left on hold this month, following on from yesterday's news that house prices increased strongly in April.
The NAB Business Survey for April showed that business conditions remain above their long run average.
The Monetary Policy Decision seems likely to contain wording to the effect that subdued inflation affords the scope for more accommodative policy should it be required in due course.