Macro Extremes (week ending March 21, 2025)

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)

Swiss and Czech 10 year government bond yields *

Copper/Gold Ratio *

U.S. 30 year minus U.S. 10 year bond yield spread *

Cattle

EUR/USD

NZD/AUD

Overbought (RSI > 70) 

Japanese 2, 5 & 10 year government bond yields *

Gold in AUD, CAD, CHF, GBP, USD and ZAR *

Austria’s ATX *

Hungary’s BUX Index *

Germany’s DAX Index *

Italy’s MIB Index *

Spain’s IBEX

Pakistan’s KSE Index *

Czech Republic’s PX Index *

Chile’s IPSA and IGPA Indices *

And Poland’s WIG Index *

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

10 year Turkish government bind yield

Copper *

Extremes below the Mean (at least 2.5 standard deviations)

CAD/EUR

SEK/USD

Dow Jones Transports *

S&P SmallCaps 600 Index *

Nasdaq Composite *

Malaysia’s KLSE 

Nasdaq 100 *

And the S&P 500 

Oversold (RSI < 30)

U.S. 3 month government bill yield *

Australian Coking Coal *

Richards Bay Coal

North European Hot Rolled Coil Steel *

Lithium Carbonate *

Lithium Hydroxide *

Newcastle Coal *

Orange Juice *

Uranium *

Indonesia’s IDX 30

And Thailand’s SET Index

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

Indian 10 year government bond yield

Notes & Ideas:

Government bond yields fell.

The few yields that rose were British, Indonesian and Japanese.

Many of last weeks extreme entrants have left, including the high bond yields.

The U.S. 10 year minus German 10 year spread moved out of oversold territory.

And Norwegian 10’s are not far away from an all-time high.

Equities were stronger.

A host of last week’s oversold names no longer appear,

While many of the overbought names are repeat entrants and seem embedded.

Weakness was seen in Chinese, Hong Kong, Swedish and Indonesian markets.

The main Vietnamese index along with some Hong Kong indices left the overbought extremes.

The former broke its 8 week advance.

Thailand’s SET broke its 7 consecutive weeks of losses.

Brazil’s BOVESPA has risen 12% since appearing as oversold in a late December 2024 edition of this weekly publication.

Interestingly, it has climbed 7.6% in the past 3 weeks compared to the 5% decline seen in the Nasdaq and S&P 500 over that same time.

The Nasdaq Biotech Index is in a 4 week losing streak.

The Nasdaq Transports and the FTSE 250 have fallen for 5 straight weeks.

Germany’s DAX Index is overbought for 8 weeks.

The S&P SmallCap 600, MidCap 400 and Russell 2000, Amsterdam’s AEX, Philly’s SOX, Nasdaq Transports, the Nasdaq Composite, the ASX Industrials and the ASX 200 all broke their declining streaks ranging between 5 and 7 weeks.

India’s Nifty and Sensex had a good week.

And Chile’s IGPA and IPSA indices have climbed for 4 consecutive weeks.

Commodities while active, were slightly subdued when compared to the rate of change seem in past weeks.

Oil and distillates rose as did Coffee, Sugar and Cattle.

Tin and Silver fell from being overbought.

Aluminium, Cotton, Coal, Platinum and Natural Gas were amongst the largest decliners.

The Copper/Gold Ratio remains overbought.

Natural Gas prices have fallen 10% over the past fortnight.

Cocoa has fallen for 7 of the past 8 weeks and is in a 5 week losing streak.

Heating Oil and the Baltic Dry Index broke its 4 weeks of declines.

Gasoline and Rubber ended their 5 week losing streaks.

U.S. Hot Rolled Coil Steel broke it 7 consecutive weeks of gains.

Orange Juice snapped its 12 weeks of consecutive losses.

Australian Coking Coal is at its lowest weekly close since November 2021.

while Lithium Hydroxide has now lingered in weekly oversold territory for 94 consecutive weeks.

Currencies were mostly quiet and uneventful.

Many of the currencies in last weeks list have departed. 

The Aussie fell and has fallen for 4 consecutive weeks against the Euro.

The Loonie rose and did the U.S. Dollar.

The Euro mainly fell.

The British Pound was firmer. 

The GBP/JPY has risen for 4 straight weeks.

The larger advancers over the past week comprised of;

Brent Crude 2.3%, WTI Crude 2%, Heating Oil 3.5%, Arabica Coffee 3.8%, Cattle 2%, JKM LNG in Yen 6.2%, Orange Juice 6.5% ,Gasoline 2.2%, Robusta Coffee 2.2%, Sugar 2.8%, Sugar #16 3.3%, Gasoil 3.6%, Uranium 1.6%, Gold in AUD 2.2%, Gold in EUR 1.9%, Oats 3.5%, KBW Bank Index 2.8%, BUX 2.4%, IBEX 2.7%, BOVESPA 2.6%, KSE 2.5%, KOSPI 3%, Nikkei 225 1.7%, NIFTY 4.3%, Oslo 2%, SA40 1.8%, SENSEX 4.2%, Strait Times 2.4%, TSX 1.7%, ASX Financials 2.2%, ASX 200 1.8%, ASX Industrials 2.4% and the ASX Small Caps rose 2.4%.

The group of largest decliners from the week included;

Aluminium (2.7%), Cotton (3.1%), Newcastle Coal (4.7%), Natural Gas (3%), Platinum (3.4%), Tin (2.5%), Silver in USD (2.3%), Rice (1.7%), Shanghai (1.6%), CSI 300 (2.3%), China A50 (3.2%), HSCEI (1.5%), IDX 30 (4.4%) and Stockholm fell 2%.

March 23, 2025

By Rob Zdravevski

rob@karriasset.com.au