Macro Extremes (week ending April 18, 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)

AUD/IDR

AUD/ZAR *

CAD/USD *

EUR/GBP

NZD.AUD

NZD/USD

PHP/USD

THB/USD

Overbought (RSI > 70) 

Australian government 10 year bond yield minus the Aust. 5 year bond yield spread *

U.S. 10 year minus U.S. 2 year bond yield spread *

BofA BB High Yield Option Adjusted Spread *

Urea (U.S. Gulf) *

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

Chile’s IGPA and IPSA equity indices

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

Australian government 10 year bond yield minus the Aust. 2 year bond yield spread 

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

EUR/USD * 

Extremes below the Mean (at least 2.5 standard deviations)

Australian 2, 3, 5 & 10 year bond yields *

German and Italian 2 year bond yields *

Australian 3 and 5 year bond yields

Polish 10 year bond yields *

Copper/Gold Ratio *

USD/CAD

USD/MXN

Oversold (RSI < 30)

Richards Bay Coal *

U.S. (DXY) Dollar Index

North European Hot Rolled Coil Steel

Lithium Carbonate *

Lithium Hydroxide *

Newcastle Coal *

Shanghai Rebar

Rubber

AUD/EUR

RMB

USD/DKK

USD/SEK

Dow Jones Transports

S&P SmallCap 600

Taiwan’s TAIEX

Nasdaq Transports

IBB Biotech ETF

And Thailand’s SET Index *

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

Australian 2 year government bond yield

Indian 10 year government bond yield *

CAD/CHF

AUD/CHF

USD/CHF

Notes & Ideas:

Government bond yields fell except for those in Japan.

The non-investment grade bond yields aren’t overbought anymore.

Norwegian 10 year yields are in a 5 week declining streak.

Notably, Australian 2, 3 and 5 year yields are oversold.

European 10’s have fallen for 5 straight weeks while Euro 2’s have done so for 6 weeks.

Equities rose, again.

Equities had a good week, except for the American indices.

All of the equity indices which were in last weeks oversold list, are not there anymore.

For now, it looks like April 4th/7th may signal the lows for global equities. 

The DAX, Hang Seng, Stockholm and Helsinki broke their 5 weeks falling streak

Copenhagen broke its 6 week losing streak.

The IBB Biotech ETF broke its 7 weeks of decline.

Commodities were mainly higher.

The Bloomberg Commodity Index has risen 3% over the past fortnight.

Many commodities which were oversold last week are no longer so, including uranium.

Cocoa, Coal, Natural Gas, Palm Oil & Tin were counted amongst the few losers.

The Baltic Dry Index has fallen for 5 straight weeks.

Sugar has declined for 4 weeks straight.

Gold as priced in ZAR has risen for 6 weeks. 

Gold in AUD is in a 7 week winning streak.

while Lithium Hydroxide has been oversold territory for 98 consecutive weeks.

Currencies were very active, again.

The Aussie rose.

The Loonie was weaker against all except the USD.

The British Pound was stronger as was the Kiwi.

The Yen was mixed as the USD/JPY is approaching oversold levels.

The U.S. Dollar (DXY) Index has fallen for 5 consecutive weeks.

Notably, the Swissie is at oversold extremes against some risk currencies.

The larger advancers over the past week comprised of;

Bloomberg Commodity Index 1.4%, Brent Crude 4.6%, WTI Crude 5.2%, Lean Hogs 5%, Copper 4.8%, Heating Oil 4.1%, JKM LNG 4.9%, Arabica Coffee 5.4%, Cattle 3.7%, JKM LNG in Yen 7.3%, Nickel 3.6%, Orange Juice 8.9%, Palladium 6%, Platinum 3.4%, Gasoline 4.9%, S&P GSCI 2.6%, CRB Index 2.1%, Dutch TTF Gas 6.6%, Gasoil 6.2%, Gold in CAD 2.7%, Gold in CHF 3.3%, Gold in EUR 2.7%, Gold in USD 2.8%, Oats 3.1%, All World Developed ex USA 4.1%, AEX 4%, ATX 5.4%, KBW Bank Index 1.9%, BUX 2.5%, CAC 2.6%, DAX 4.1%, FTSE 100 5.7%, Hang Seng 2.3%, IBEX 5.1%, Bovespa 1.5%, IDX 2.9%, KLSE 3.1%, KRE Regional Banks 4.4%, KSE 2.1%, KOSPI 2.1%, FTSE 250 4%, Mexico 3%, Nasdaq Biotechs 1.5%, Nikkei 225 3.4%, NIFTY 4.5%, Oslo 2.8%, Copenhagen 4%, Helsinki 3.7%, PX 3.2%, Russell 2000 1.6%, South Africa40 4%, SENSEX  4.5%, SET 2%, SMI 3.8%, IGPA 4.8%, IPSA 5.2%, STI 5.9%, TA35 3%, TSX 2.6%, FTSE 100 3.9%, WIG 4.4%, ASX Financials 3.2%, ASX 200 2.3%, ASX Materials 3.2%, ASX SmallCaps 2.3% and the XBI Biotech ETF rose 2.2%.

The group of largest decliners from the week included;

Cocoa (1.7%), Newcastle Coal (2%), Natural Gas (8%), Palm Oil (4.2%), Tin (2.1%), Corn (1.6%), Wheat (1.3%), Dow Jones Industrials (2.6%), Nasdaq Composite (2.6%), Nasdaq 100 (2.3%), SOX (4%) and the S&P 500 fell 1.5%.

April 20, 2025

By Rob Zdravevski

rob@karriasset.com.au