The ANZ Commodity Price Index ran out of puff in late 2017 with prices falling a further 2.2% in December. While dairy led the decline (-5.6% m/m) broader based weakness has started to creep in too, with nondairy components slipping 0.4% m/m in December. The double-whammy for NZD returns was a 0.6% m/m increase in the NZD TWI. This saw NZD commodity prices slide 3.0% m/m in December. This was the 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 ... (full story)