RBA meeting minutes: the prices of Australia's commodity exports had increased since the previous meeting

"Members commenced their discussion of domestic economic conditions by noting that the prices of Australia's commodity exports had increased since the previous meeting and were around 30 per cent above the lows of early this year. Further reductions in production of bulk commodities by high-cost producers in China had contributed to these price increases. Reflecting the rise in commodity prices since earlier in the year, the terms of trade had increased in the June quarter.

The ABS capital expenditure survey and measures of work done on non-residential construction indicated that mining investment had continued to fall in the June quarter, in line with the forecast presented in the August Statement on Monetary Policy. The estimate of nominal investment intentions from the capital expenditure survey implied a further large decline in mining investment in 2016/17, in line with earlier expectations. However, the peak subtraction from GDP growth was still expected to have occurred in 2015/16 and members noted that there had been some signs of an improvement in sentiment in parts of the mining industry.

Growth in Australia's major trading partners had been a little below its decade average over the first half of 2016, which was in line with expectations at the time of the August Statement on Monetary Policy. Conditions in the global industrial sector remained subdued but looked to have stabilised recently. GDP growth in the major advanced economies had been close to, or above, trend over the past year and labour market outcomes had continued to improve. Globally, inflation remained low and below most central banks' targets. Members noted, however, that the weighted average of core inflation for the economies from which Australia sources its imports had been around its longer-term average and that movements in Australian dollar import prices had been dominated by changes in the exchange rate rather than global price developments".