rob zdravevski's blog

Macro Extremes (week ending May 8, 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) 

U.S. 3, 5 and 7 year government bond yields

U.S. 5 year minus U.S. 3 month yield spread

Shanghai Rebar

KLSE

Overbought (RSI > 70)  

Japanese 5 & 10-year government bond yields

Australian Coking Coal

AUD/CAD

AUD/CHF *

AUD/GBP

AUD/IDR *

AUD/INR *

AUD/JPY *

AUD/SGD *

AUD/THB *

AUD/USD

BRL/USD *

USD/IDR *

Commodity Bloomberg Commodity Index *

Aluminium *

Cotton *

Gasoline *

China Iron Ore

Rubber *

CRB Index *

Urea (U.S. Gulf and Middle East) *

BUX equity index *

Egypt’s EGX Index *

Russell 2000

Nikkei 225

S&P 500

Israel’s TA-35

And Türkiye’s BIST Index

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

Baltic Dry Index

TAIEX *

Nasdaq Composite

KOSPI *

Nasdaq 100

Philadelphia’s SOX Index *

Extremes below the Mean (at least 2.5 standard deviations) 

None

Oversold (RSI < 30) 

CAD/AUD

CHF/AUD *

EUR/AUD *

JPY/AUD *

NZD/AUD *

USD/CNH *

USD/BRL *

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

None

Notes & Ideas:

Government bond yield fell.

Korean 10-year yields have risen for 4 weeks.

The Copper/Gold Ratio have risen for 5 straight weeks.

And the Chinese 10-year yields rose and snapped 4 weeks of decline.

Equities moved higher.

The big news in equities is the Russell 200, Nikkei 225, S&P 500, the Nasdaq Composite and Nasdaq 100 join the overbought list.

Shanghai Composite, CSI 300 and the KOSPI are in a 5-week winning streak.

The China A50, Nasdaq Composite, Nasdaq 100, SOX and S&P 500 have closed higher for 6 straight weeks.

The S&P SmallCap 600, Russell 2000 and Vietnam’s VN Index have climbed for 7 consecutive weeks.

While Brazil’s BOVESPA has declined for the past 4 weeks.

Commodities were mixed.

Coal, Cocoa, Copper, Lithium, Tin, Silver and Rice were the notable gainers.

Crude Oil, Gases, Distillates, Nickel, Coffee, Urea and Wheat were amongst the decliners.

Cattle, Heating Oil, Gasoil & Wheat left overbought territory.

Australian Coking Coal is in a 4-week winning streak.

Iron Ore fell and broke a 4 week winning run .

The Baltic Dry Index has risen for 6 weeks.

And the Middle East Urea price fell and snapped 11 consecutive weeks of advance.

Currencies were busy, again.

News in currencies was the AUD/USD reaching an overbought extreme.

Aussie/Rupee has climbed for 5 weeks.

The Aussie has risen for 6 weeks against the Euro, Rupiah and Singapore Dollar.

The CAD/USD fell and broke its 4 week winning run.

BRL/USD has climbed for 8 weeks.

While the CAD/USD and AUD/THB fell and snapped winning streaks.

The larger advancers over the past week comprised of; 

Richards Bay Coal 2.7%, Baltic Dry Index 9.1%, Cocoa 16.3%, Copper 5.2%, Lithium Carbonate 8%, Lithium Hydroxide 7%, Tin 9.3%, Platinum 2.4%, Iron Ore China 2.9%, Silver in AUD 6%, Silver in USD 6.6%, Gold in AUD 1.6%, Gold in CAD 2.8%, Gold in EUR 1.7%, Gold in GBP 1.8%, Gold in USD 2.2%, Rice 8.2%, Shanghai 1.7%, All World Developed ex USA 2.1% ATX 1.5%, DFMM 2.4%, EGX 3.6%, FCATC 6.9%, MIB 2.2%, Hang Seng 2.4%, IBB 1.6%, Russell 2000 1.8%, TAIEX 6.9%, Nasdaq Composite 4.5%, KLSE 1.7%, KSE 5%, KOSPI 13.6%, FTSE 250 1.4%, S&P Midcap 400 1.6%, Mexico 2.9%, NBII 2.2%, Nasdaq 100 5.5%, Nikkei 225 5.4%, PSE 2.2%, SA40 2.7%, SOX 11.1%, S&P 500 2.3%, TA35 2%, BIST 4.3%, Vietnam 3.3%, XBI 3.3% and the ASX Materials rose 4.3%.

The group of largest decliners for the week included; 

Brent Crude (6.4%), WTI Crude (6.4%), Lean Hogs (2.6%), Arabica Coffee (4.1%), Cattle (1.6%), LNG JKM in Yen (3.3%), Newcastle Coal (2.3%), Nickel (2.6%), Orange Juice (3.2%), Palladium (3.8%), Gasoline (1.9%), Sugar (1.7%), S&P GSCI (3.7%), Dutch TTF Gas (3.6%), Urea (4.4%), Gasoil (8.2%), Corn (1.9%), Wheat (2.9%), KBW Bank Index (1.9%), DJ Transports (1.9%), OBX (2.4%), Helsinki (1.4%) and Filipino PSI fell 1.9%.

May 10 2026

By Rob Zdravevski 

rob@karriasset.com.au

Aussie interest rates are saying……

For holders of Australian Dollar cash or AUD borrowers, here are the 6 notable moments over the past 20 years when to either a) lock in your term deposits, b) let your interest rates on your borrowings ‘float’ and/or c) consider buying some bonds.

May 7, 2026

But it’s a good looking parabola

SOX Index is stretched but not as much as the late 1990’s

Warning for those Long WTI Crude

WTI Crude Oil can’t make a ‘higher high’ and break below $77 in the +2 forward month, improves probability of $57 being seen……

and then, where will all the $150 and $200 per barrel call fade to?

May 7, 2026

Macro Extremes (week ending May 1, 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) 

U.S. 10-year breakeven inflation rate

Cattle

Wheat

Overbought (RSI > 70)  

Australian and Japanese 2-year government bond yields

5 & 10-year Japanese bond yields

AUD/CHF

AUD/EUR

AUD/IDR *

AUD/INR

AUD/JPY *

AUD/SGD *

AUD/THB *

BRL/USD *

CNH/USD *

USD/IDR

Aluminium *

Commodity Bloomberg Commodity Index *

Heating Oil

Gasoline *

Rubber

CRB Index *

Urea (U.S. Gulf and Middle East) *

Gasoil *

BUX equity index *

Egypt’s EGX Index *

TAIEX *

KOSPI *

And Norway’s OBX

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

Cotton *

Philadelphia’s SOX Index *

Extremes below the Mean (at least 2.5 standard deviations) 

PHP/USD

Lumber

Oversold (RSI < 30) 

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

CHF/AUD *

EUR/AUD

JPY/AUD *

NZD/AUD *

USD/BRL

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

None

Notes & Ideas:

Government bond rose again but did so, quietly.

U.S. inflation break-even rates climbed to ‘newer’ highs.

Therefore, the U.S. 10-year yield minus 10-year inflation breakeven rate spread rose and in doing do, snapped 4 weeks of decline.

The Chilean 10-2-year yield spread and the Copper/Gold Ratio have risen for 4 straight weeks.

And the Chinese 10-year yields have fallen for the past 4 weeks.

Equities were mixed in a quieter week.

Shanghai Composite, CSI 300 and the KOSPI are in a 4-week winning streak.

The China A50, Nasdaq Composite, Nasdaq 100, SOX and S&P 500 have closed higher for 5 straight weeks.

The S&P SmallCap 600, Russell 2000 and Vietnam’s VN Index have climbed for 6 consecutive weeks.

While Taiwan’s TAEIX is trading at nearly 100% above its 4-year mean.

Commodities firmed.

Coal, Oil, Cotton, Orange Juice, Gases, Sugar, Corn and Wheat were the notable gainers.

Aluminium, Tin, Coffee, Copper and Gold were amongst the decliners.

Iron Ore is in a 4-week winning streak.

The Gold Volatility Index rose and broke 4 weeks of decline.

Aluminium fell and broke its 5-week higher run.

While Rotterdam Coal rose and snapped 7 weeks of losses.

Gasoline has advanced 21% for the past 2 weeks.

Brent Crude Oil has soared 28% over the past fortnight.

AUD Gold price is seeing its lowest weekly RSI reading since October 2023.

And Middle East Urea prices have seen 11 consecutive advancing weeks.

Currencies were busy.

The Aussie has risen for 5 weeks against the Swissie, Euro, Rupiah and Singapore Dollar and its nearly overbought across a range of pairs.

The CAD/USD, GBP/EUR, GBP/USD and USD/IDR are also in 5-week winning streaks.

AUD/INR and the AUD/THB have climbed for 4 weeks.

The Loonie rose, again.

Yen was stronger.

COP/USD fell 3% and snapped a 7-week winning streak.

The Euro weakened, again.

BRL/USD has climbed for 7 weeks.

And the British Pound was mixed.

The larger advancers over the past week comprised of; 

Richards Bay Coal 7.7%, Rotterdam Coal 3.5%, Bloomberg Commodity Index 3%, Baltic Dry Index 2.4%, Brent Crude Oil 9.1%, Cocoa 4.9%, WTI Crude Oil 8%, Cotton 6.2%, Heating Oil 4%, JKM LNG 1.9%, Cattle 3.2%, JKM LNG in Yen 2.5%, Lithium Carbonate 4.8%, Newcastle Coal 4.2%, Natural Gas 2.9%, Nickel 1.8%, Orange Juice 16.6%, Palladium 2.4%, Gasoline 8%, Sugar 6.8%, S&P GSCI 4.4%, Rubber 2.8%, CRB Index 3.8%, Dutch TTF Gas 2.1%, Gasoil 4%, Corn 3%, Oats 4.1%, Soybeans 2.1%, Wheat 3.4%, MIB 1.2%, Dublin 2.6%, KRE Regional Banks 1.4%, KOSPI 1.9%, Nasdaq 100 1.5%, OMX 1.6%, Lisbon 2.5%, SET 2.6%, TA35 1.4% and the ASX Industrials rose 1.5%.

The group of largest decliners for the week included; 

Aluminium (2.2%), Copper (1.6%), Arabica Coffee (1.7%), Lumber (1.6%), Lithium Hydroxide (2.8%), Tin (3%), Robusta Coffee (3.4%), Gold in AUD (2.8%), Gold in CAD (2.6%), Gold in CHF (2.4%), Gold in GBP (2.4%), Gold in USD (2%), IDX (2.4%), DJ Transports (1.4%), IBB Biotech (1.5%), BOVESPA (1.8%), KSE (4.5%), Mexico (2%), NBI Biotech (1.7%), Stockholm (1.3%), PSE (1.8%), PX (2.4%), SA40 (1.5%), IGPA (2.2%), Nasdaq Transports (2.8%), XBI (2.2%) and Poland’s WIG Index fell 1.6%.

May 3 2026

By Rob Zdravevski 

rob@karriasset.com.au 

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