CommodityPrice ShockLooms
A leading economist warns spiking commodity prices make a global inflation surge "as certain as night follows day". Here is what it means for Australian households and the property market.
By Tony Lawson · April 2026
A Stark Warning From a Leading Indicator
A leading economist has issued a stark warning as a key global index hits levels that spell trouble for households across Australia. Spiking commodity prices, from oil to agriculture and base metals, mean higher global inflation is "as certain as night follows day."
That is the call from leading economist Stephen Koukoulas, who said his favourite leading indicator for future inflation, the CRB commodity index, is at "near record highs." The index has risen more than 80 points since the outbreak of war in Iran and was up 6.68 per cent in the past month alone.
Looking longer term, the CRB has spiked by 32 per cent compared to the same time last year. That is the kind of move that historically precedes a change of tack from central banks around the world.
Why the CRB Matters: A Broader Lens on Inflation
"Now, why I like the CRB index is that it's a broader measure than the Reserve Bank index of commodity prices," Mr Koukoulas explained. "This is a global index. It has a very high weighting towards energy commodities, oil, gas, heating oil, and those sorts of things."
CRB Commodity Index — 12 Month Trajectory
A broad global commodity benchmark covering energy, agriculture, base and precious metals, and livestock.
Source: CRB Index, illustrative monthly path. Up 32% year-on-year and 6.68% in the past month, per Stephen Koukoulas.
The trajectory tells the story. Twelve months ago the index sat in the high 240s. It has since marched almost without pause through every level that previously acted as resistance, breaking past the 300 mark and pressing into territory that veteran traders describe as "near record." Each step higher locks in another round of input-cost inflation that has not yet hit the consumer price index.
What Sits Inside the Basket
"It has an even higher weight for agriculture, which goes into food production, of course, and that's things like corn, wheat, coffee, orange juice, those sorts of things which are very important for food and other clothing manufacture, an important part of inflation," Mr Koukoulas said.
The index also captures base metals such as copper, nickel and aluminium, and precious metals such as gold and silver. There are livestock indicators for lean hogs and live cattle as well. It is, by design, a broad index of commodity prices.
What Sits Inside the CRB Index
Approximate sector weights across the basket of commodities.
Indicative weights. Energy and agriculture together drive the bulk of the index's inflation signal.
"When it's going up and accelerating, it points to higher inflation. Because all of those things, when they go up, you see the price of food going up. And even a lot of the base metals, if those prices increase, they're important inputs into a lot of the manufacturing process."
That last point is the most important one for households. Base metals are not headline inflation, but they are the silent driver of the cost of every appliance, vehicle, and building component that follows. Six months from now, today's copper price is sitting in the price tag of a new air conditioner.
Australia Faces a Crucial Fortnight
Australia faces a crucial fortnight with new inflation data, the next Reserve Bank interest rate call, and the federal budget all due in the first two weeks of May. AMP chief economist Shane Oliver told NewsWire that headline inflation could jump by as much as 1.5 per cent when the official data is released.
"We are going to see a spike," Mr Oliver said. "On our rough estimates, fuel prices rose by 30 per cent in the month of March, a bit less for petrol, a lot more for diesel, and that is on its own going to add more than one percentage point to inflation."
March 2026 Fuel Price Move, Australia
One-month change at the bowser and the wholesale gate, per AMP and industry estimates.
Source: AMP chief economist Shane Oliver, March 2026. Diesel led the surge, with petrol a step behind.
Several top economists have predicted at least another two rate rises in 2026, potentially taking the cash rate up to 4.85 per cent. For mortgage holders, every additional 25 basis points compounds into thousands of dollars of additional annual interest on the average Adelaide loan size.
The Global Inflation Forecast Is Being Rewritten
Consultancy firm KPMG said in its quarter one 2026 economic outlook that the implications of the oil price shock felt across the world would take some time to fully play out. It is expected, however, that the economic crisis will fuel higher prices across the globe.
"Inflation is expected to surge globally as oil is a ubiquitous input across virtually every sector within an economy, with food prices likely to feel the impact first, followed by other goods and services later in the year," its report stated.
KPMG World Inflation Forecast
Headline CPI, annual percentage change. World, United States, and Europe.
Source: KPMG Quarter One 2026 Economic Outlook.
The numbers are sobering. KPMG forecasts world inflation to rise from 3.4 per cent in 2025 to 4.8 per cent this year, before falling back to 3.5 per cent in 2027. The United States is predicted to hit a 4.7 per cent inflation rate, up from 2.7 per cent last year. Europe would also spike from 2.1 per cent to 3.6 per cent in 2026.
A 2.0 percentage point jump in US inflation in a single year is not a soft landing. It is the kind of move that forces hard policy choices.
Central Banks Run Out of Patience
The US Federal Reserve is set to hold a two-day meeting this week, with the central bank predicted to hold cash rates steady, despite inflation concerns with US consumer inflation hitting its highest point in two years during March, fuelled by elevated energy costs.
It is one of a host of major central banks sitting down this week, with the European Central Bank, Bank of Japan, Bank of England and Bank of Canada all meeting. The synchronised nature of these meetings underscores the global character of the inflation challenge.
Mr Koukoulas wondered if the US central bank "will sound a little bit hawkish" at its next meeting and flag an intention to put up interest rates. "So keep watching commodity prices," he said. "They're a really good leading indicator of global inflation."
If the Fed turns hawkish, the Reserve Bank of Australia loses much of its room to cut. The argument shifts from when rates will fall to whether they need to rise again.
The Property Implications
Commodity-led inflation does not stay in the petrol bowser. It flows into the cost of building materials, the price of food on the shelf, the cost of running a household, and ultimately the path of interest rates. For Adelaide property, every link in that chain matters.
If headline CPI prints as hot as economists are forecasting, the case for the Reserve Bank to hold or even hike the cash rate strengthens considerably. Several top economists are already canvassing the possibility of two more rate rises in 2026, taking the cash rate as high as 4.85 per cent. That is a meaningful shift in borrowing capacity for the average buyer.
On the supply side, sustained energy and base metal prices feed directly into construction costs. South Australia's housing pipeline is already constrained by labour and material costs. A second wave of input-cost inflation would widen the gap between dwelling approvals and completions further.
The result is the classic late-cycle squeeze: borrowing capacity contracts at the same time replacement cost rises. In that environment, well-located established homes with secure rental demand tend to outperform speculative new-build segments.
Fuel-Led CPI Spike
Headline inflation could jump as much as 1.5 per cent on the next print, per AMP.
Rate Path Risk
Cash rate could push toward 4.85 per cent if energy-driven CPI proves sticky.
Build Cost Pressure
Base metal and energy prices feed straight into construction inputs and completions.
Read the Companion Reports
Inflation does not move in isolation. See our analysis of the Reserve Bank's policy bind and the immigration-led economy driving demand.
Whether you are buying, selling, or holding through this cycle, the right strategy depends on understanding how macro pressure flows into local prices. Let's talk about what this means for your position.
Source: news.com.au coverage of Stephen Koukoulas and AMP chief economist Shane Oliver, KPMG Quarter One 2026 Economic Outlook. Illustrative chart data. This is general market commentary and does not constitute financial advice. Please disregard if you have already enlisted another agent. RLA 308543