Macro Extremes (week ending March 28, 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)

Czech & Swedish 10 year government bond yields *

Copper/Gold Ratio *

Silver in AUD and USD

AUD/IDR

NZD/AUD *

Singapore’s Strait Times Index

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 *

Italy’s MIB Index *

Spain’s IBEX

Pakistan’s KSE 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 bond yield

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

Copper *

Extremes below the Mean (at least 2.5 standard deviations)

Taiwan’s TAEIX Index

Philadelphia’s SOX Index

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 *

Nasdaq Transports

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 were subdues and mixed.

The Australian 10 year minus Australian 2 year bond yield spread has risen for straight weeks.

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

Equities were mostly weaker.

Yet it seemed more bearish than it was.

For example the CSI 300, the Dow Jones Transports and the FTSE 100 only closed 0.1% lower from last week’s close.

Germany’s DAX Index and Czechia’s PX Index fell from overbought territory.

Dow Jones Transports, the S&P SmallCaps 600 Index, the Nasdaq Composite, Indonesia’s IDX 30 and the S&P 500 are not oversold this week.

Cairo has risen for 4 straight weeks while Chile’s IGPA and IPSA have risen for the past 5 weeks.

Copenhagen is in a 4 week losing streak.

The Nasdaq Biotech backed and filled a gap and has fallen for 5 weeks.

DJ Transports, the FTSE 250 and the SOX have fallen for 6 consecutive weeks.

The KSE broke a 6 week winning streak.

The KLSE broke its 5 consecutive weeks of decline.

And the ASX Financials have climbed 4.8% over the past fortnight.

Commodities were busy.

Crude, Distillates, Precious Metals, Tin & Nickel rose.

Aluminium, LNG, Coffee, Sugar, Corn, Wheat & Oats were the notable decliners.

The Copper/Gold Ratio remains overbought.

Cattle drops out from being overbought.

Australian Coking Coal is in a 4 week losing streak.

North European Hot Rolled Coil Steel is nearing the exits from oversold territory.

Gold as priced in AUD, USD and CAD has risen for 4 consecutive weeks.

Cocoa has fallen for 7 of the past 9 weeks although it did break its 5 week losing streak.

while Lithium Hydroxide has been oversold territory for 95 consecutive weeks.

Currencies were mostly uneventful, again.

Often a simmering in FX volatility leads to the same in equities.

The Aussie was quiet and it halted it 4 consecutive week slide against the Euro.

The Canadian Dollar rose slightly, again. 

The Loonie has risen for straight weeks against the USD.

Both ‘risk’ currencies (AUD & CAD) rose against the Yen.

And the GBP/JPY has risen for 5 straight weeks.

The larger advancers over the past week comprised of;

Cocoa 3.6%, WTI Crude 1.6%, Cotton 2.5%, Newcastle Coal 2.5%, Natural Gas 1.9%, Nickel 1.9%, Palladium 2.4%, Gasoline 2.1%, Tin 5.7%, Silver in AUD 3.1%, Silver in USD 3.3%, Gold as priced in AUD, CAD, CHF and GBP rose 1.8%, Gold in USD 2%, Gold in ZAR 3.2%, BUX 1.6%, IDX 4%, BIST 6.8% and the ASX Financials rose 2.6%.

The group of largest decliners from the week included;

Aluminium (3.9%), Baltic Dry Index (2.5%), U.S. Midwest Hot Rolled Coil Steel (3.6%), JKM LNG (2.2%), Arabica Coffee (2.9%), JKM LNG in Yen (3.4%), Orange Juice (14.1%), Robusta Coffee (3.2%), Sugar (3.9%), Sugar #16 (2.6%), Dutch TTF Gas (4.5%), Corn (2.4%), Oats (8%), Wheat (5.4%), ATX (2%), KBW Bank Index (1.9%), CAC (1.6%), DAX (1.9%), Russell 2000 (1.7%), TAIEX (2.7%), Nasdaq Composite (2.6%), KRE Regional Banks (1.5%), KOSPI (3.2%), Nadsaq Biotechs (2.6%), Nasdaq 100 (2.4%), Nikkei 225 (1.5%), Copenhagen (2.7%), Helsinki (3.3%), Stockholm (3.3%), PSE (1.9%), SMI (1.8%), SOX (6%), S&P 500 (1.5%), TA35 (1.6%), Nasdaq Transports (1.6%) and the iShare Biotech ETF fell 2.5%.

March 30, 2025

By Rob Zdravevski

rob@karriasset.com.au