rob zdravevski's blog

Spend now, Pay later capex plans

My capex and free cash flow quip for the day is….

Microsoft has the operating cashflow to cover its capital expenditure plans.

Oracle hasn’t and less so when Oracle needs to borrow money to fund its proposed strategy.

And keep in mind that it’s Debt is already amounting to 4 times more than its EBIT.

But I wonder if those capex plans can really be ‘owned’ by ORCL’s when it’s the lender’s money providing it so.

While over that the other enterprise software giant (SAP), their EUR 20 billion capex plans are more so based around its ‘cloud offering, rather than an AI hyper-scaling race. Incidentally, they are spacing out this ‘spend’ over 20 years.

Easy-peasy when you’re cranking out operating cash flow of EUR 8 billion and have EUR 2 billion of net cash on the balance. I’m thinking “how wonderfully sensible and German!”.

Speaking of cash flow, Nvidia’s free cash flow of $84 billion equates to a free cash flow yield (FCF) of below 2%.

Salesforce.com and BP plc’s FCF yield is 10%.

April 30, 2026

Inflation readings are creating some cracks

A small crack is developing but it’s only a hairline.

When the Euro Area inflation rate crosses above certain lines, the Eurostoxx 50 equity index sees a peak within a month or three.

April 30, 2026

Bitcoin’s correlation to risk on & off continues

Bitcoin continues to serve as a notable indicator of risk tolerance in comparison to the equities market.

In the correlation analysis below, I have overlaid the Nasdaq 100 to provide a clearer illustration of this relationship.

Currently, the price of Bitcoin appears to be experiencing a ‘mini’ rally, which I believe may be a headfake. I anticipate that Bitcoin will be trading in the low US$60,000’s in the coming months.

April 29, 2026

Picking a top in Cotton

10 weeks ago, the price of Cotton registered an ‘oversold quinella’.

Macro Extremes (week ending February 6, 2026)

This week it is listed as an ‘overbought quinella’.

Macro Extremes (week ending April 24, 2026)

While it’s not as sexy as Crude Oil but when you include a 6 week winning streak, it has been a nice rally and so that’s enough for now.

April 26, 2026

Macro Extremes (week ending April 24, 2026)

A weekly Macro, Cross Asset review of prices trading at extremes which may generate future investment ideas and opportunities.

The following assets (on a weekly timeframe) either registered an Overbought or Oversold reading and/or have traded more than 2.5 standard deviations above or below its rolling mean. 

n.b. pricing of (commodity) futures contracts is only considering the immediate front month. 

* denotes multiple week inclusion 

Extremes above the Mean (at least 2.5 standard deviations) 

Baltic Dry Index

Overbought (RSI > 70)  

5 & 10-year Japanese bond yields

AUD/IDR *

AUD/JPY *

AUD/SGD *

AUD/THB

BRL/USD

CNH/USD *

Aluminium

Commodity Bloomberg Commodity Index

Brent Crude Oil

Gasoline

CRB Index

Urea (U.S. Gulf and Middle East)

Gasoil *

BUX Index *

Egypt’s EGX Index *

TAIEX *

KOSPI

Nikkei 225 Index

And Norway’s OBX

The Overbought Quinella (Both Overbought and Traded at > 2.5 standard deviations above the weekly mean) 

COP/USD

USD/IDR

Cotton *

Philadelphia’s SOX Index *

Extremes below the Mean (at least 2.5 standard deviations) 

Chinese 10-year government bond *

Oversold (RSI < 30) 

Australian 10-year minus Aussie 2-year bond yield spread *

CHF/AUD *

JPY/AUD *

NZD/AUD *

The Oversold Quinella (Both Oversold and Traded at < 2.5 standard deviations below the weekly mean) 

None

Notes & Ideas:

Government bond changed direction and rose.

Any losing streaks, ended.

Japanese 2’s left overbought territory.

U.S. 10-year inflation breakeven rate is at its highest since late July 2025.

While the U.S. real interest rates are in a 4-week losing streak.

Equities were weaker.

A few more dropped out from the overbought club.

However, the Nasdaq 100 is near an overbought quinella.

The Nasdaq Composite, China A50, S&P 500 and the SOX extended their winning streaks to 5 weeks.

The latter has risen 36% over that time.

All the other 4-week streaks listed last week, are no longer intact.

The S&P Small Cap 600, Russell 2000, S&P 600 Value and Vietnam’s VN Index are in 5-week winning streaks.

While the Dow Jones Transports exhibited a mini blow-off top to finish the week lower and snapping its 5-week streak of advance.

Lastly, Saudi Arabia’s Tadawul index fell and broke its 7 consecutive weeks of higher prices.

Commodities were mixed.

Oil, Cocoa, Gases, Coal, Coffee and Sugar were the notable gainers.

Orange Juice, Precious Metals, Oats and Rice were amongst the decliners.

Aluminium has risen for 5 weeks.

Copper fell and broke its 4-week winning streak.

European Steel, Dutch TTF Gas and Uranium prices fell and snapped 5 weeks of advance.

Cotton fell and ended its 6-week run of higher prices.

While Rotterdam Coal have fallen for 7 weeks.

And U.S. Gulf Urea prices fell to break its 19 consecutive advancing weeks.

Currencies were steady.

The Aussie has risen for 4 weeks against the Swissie, Euro, Rupee and Singapore Dollar and its nearly overbought across a range of pairs.

The Loonie rose.

COP/USD is in a 7-week winning streak.

The Euro weakened, again.

BRL/USD has climbed for 6 weeks.

And the British Pound was firmer.

The larger advancers over the past week comprised of; 

Bloomberg Commodity Index 3.5%, Baltic Dry Index 3.8%, Brent Crude Oil 17.1%, Cocoa 4.6%, WTI Crude Oil 14.3%, Palm Oil 3.3%, Heating Oil 14.9%, JKM LNG 10.3%, Arabica Coffee 3.8%, JKM LNG in Yen 5.9%, Aluminium 1.9%, Newcastle Coal 6.1%, Nickel 4.9%, Gasoline 13.6%, Robusta Coffee 8.7%, Sugar 4.7%, S&P GSCI 7.3%, CRB Index 4.5%, Dutch TTF Gas 15.7%, Gasoil 21.5%, Corn 1.4%, Wheat 2.9%, EGX 1.8%, TAIEX 5.8%, Nasdaq Composite 1.5%, KLSE 1.5%, KOSPI 4.6%, Nasdaq 100 2.4%, Nikkei 225 2.1%, SOX 10% and Vietnam’s VN Index rose 2%.

The group of largest decliners for the week included; 

Natural Gas (5.7%), Orange Juice (13.9%), Palladium (5.7%), Platinum (5.2%), Silver (6.3%), Gold (2.4%), Oats (1.9%), Rice (2.2%), All World Developed ex USA (2.2%), ATX (3.4%), BUX (3.6%), CAC (3.2%), IDX (6.6%), DAX (2.3%), DFM (2.2%), DJ Transports (6.8%), MIB (2.5%), IBB (3.9%), IBEX (4.3%), BOVESPA (2.6%), Dublin (5.6%), KRE Regional Banks (2.1%), KSE (1.9%), FTSE 250 (2.7%), NBI (3.8%), NIFTY (1.9%), Copenhagen (3%), Stockholm (2.6%), PX (3.7%), SA40 (4.1%), SENSEX (2.3%), SET (1.8%), SMI (1.9%), IGPA (2.1%), Eurostoxx 50 (1.9%), Tadawul (3.9%), WIG (3.4%), XBI (3.9%), ASX Materials (2.1%) and the ASX 200 fell 1.8%.

April 26, 2026

By Rob Zdravevski 

rob@karriasset.com.au 

The long energy trade commenced much earlier

My December 7, 2025 edition of Macro Extremes was prescient in listing the Dutch TTF Natural Gas contract in the category of an “oversold quinella”.

That was before ‘everyone’ became an expert in how many ships passed through the Strait of Hormuz on a daily basis.

A few months later, we saw an ‘overbought quinella’.

That was the ‘fat part’ of the trade.

Macro Extremes is published every Sunday.

April 24, 2026

An Aussie Dollar / Japanese Yen extreme

The AUD/JPY is trading at places that it seldom does.

April 24, 2025

Sure, credit spreads are narrow…….but it’s the price action and it relates to equities that I’m interested in.

Here is a snippet.

April 22, 2026

Stocks should climb this ‘wall of worry’

When the National Australia Banks’ Australian Consumer Confidence Index is so pessimistic (as denoted by the circles), then take a look at the rectangles placed on the ASX 200 Index.

April 22, 2026