Insights 
VT 
Australia’s export price index has risen to 3.2% in the fourth quarter, following a previous decline of 0.9%. This marks a turnaround in export prices compared to the earlier quarter.
The increase in the export price index indicates changes in global demand and market conditions. Analysts observe that shifts like this can impact the country’s trade balance and economic outlook.
Exporters May Experience Changes
Exporters may experience changes in revenue due to these price adjustments. The latest data could influence strategies regarding export volumes and market targeting.
Overall, the quarterly figures provide insights into the broader economic environment affecting Australia. They offer a snapshot of the trading conditions that businesses in the export sector are navigating.
The sharp turnaround in Australia’s export price index during the fourth quarter of 2025 is a significant bullish signal. This data confirms the trend we saw in the December 2025 trade balance figures released earlier this month, which showed a surplus of A$13.2 billion, the highest in six months. Traders should consider that this strength will likely continue to support the Australian dollar, making long positions in AUD/USD futures or call options attractive.
This price strength is being driven by commodities, with iron ore prices consistently holding above $135 a tonne through January 2026 on the back of resilient Asian demand. This directly benefits major exporters on the ASX, and we have already seen stocks like BHP and Rio Tinto outperform the broader index since the start of the year. Call options on the XJO index or on specific mining and energy stocks could be used to gain exposure to this ongoing momentum.
Stronger Economic Data Fuels Inflation Concerns
The stronger economic data is now fueling inflation concerns, especially after last week’s Q4 2025 CPI reading came in hotter than expected at an annual rate of 3.4%. Consequently, market pricing for a mid-year interest rate cut by the Reserve Bank of Australia has all but evaporated. Traders in the interest rate markets should be positioning for the RBA to hold rates steady, potentially even adopting a more hawkish tone at its meeting next week.
Given this, we should also anticipate a rise in market volatility as expectations are repriced. While the primary trend appears positive, employing strategies like collars on equity positions can protect against a sudden reversal in commodity prices. Options on the AUD/USD also present a defined-risk way to speculate on currency movements driven by these strong terms of trade.
