Macro Extremes (week ending April 25, 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)

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

AUD/IDR *

AUD/ZAR *

CAD/USD *

JPY/USD

NZD/AUD *

NZD/USD *

PHP/USD *

THB/USD *

Overbought (RSI > 70) 

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

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

Urea (U.S. Gulf) *

USD/IDR

Czechia’s PX Index

Chile’s IGPA and IPSA equity indices

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

U.S. 10 year minus U.S. 5 year bond yield spread *

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

EUR/USD * 

Extremes below the Mean (at least 2.5 standard deviations)

Australian 3 & 5 year bond yields *

German and Italian 2 year bond yields *

South Korean 10 year bond yields *

Copper/Gold Ratio *

CAD/CHF *

USD/CAD *

USD/MXN *

USD/SGD

Oversold (RSI < 30)

Richards Bay Coal *

U.S. (DXY) Dollar Index

North European Hot Rolled Coil Steel

Lithium Carbonate *

Lithium Hydroxide *

Newcastle Coal *

Rubber *

USD/SEK *

Dow Jones Transports *

Nasdaq Transports *

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 *

Notes & Ideas:

Government bond yields were mixed.

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

Chilean 2 year bond yields have fallen for 4 straight weeks.

Norwegian & Indian 10 year yields are in a 6 week declining streak.

Notably, Australian 3 and 5 year yields are oversold.

German 10’s have fallen for 6 straight weeks while German 2’s broke 6 weeks of declines.

The latter also reverted to a long term mean.

Chinese 10’s broke 4 week losing streak.

Polish 10 year yields rose and broke a 6 week losing streak.

Equities rose, everywhere.

Equities had a another stellar week.

As a result, this week several equity indices have left the oversold list.

Many indices are in 3 week rising streaks.

For example, the DAX has risen 9% in the past fortnight.

And as mentioned in last week edition, for now, continues to look like April 4th-7th may signal the lows for global equities. 

Commodities were mainly higher, again.

The largest winners were Cocoa, Coffee, Oats, Tin, Hogs, Tin and Shipping Rates.

Gold fell (albeit slightly) across various currency pricing.

Gases, Orange Juice, Palladium, Rice and Wheat were counted amongst the few losers.

Natural Gas is in a 4 week losing streak.

U.S. Gulf Urea prices have risen for 4 straight weeks.

The Baltic Dry Index snapped it 5 straight weeks of decline. 

Sugar broke its 4 week losing streak. 

Gold as priced in ZAR ended its 6 weeks of advance. 

And Gold in AUD 7 week winning streak also came to an end.

while Lithium Hydroxide has been oversold territory for 99 consecutive weeks.

Currencies were very active, again.

A few currency pairs have left the list this week.

Commensurate with the ‘risk-on’ environment, the Aussie rose while the Yen and Swissie fell.

The British Pound was stronger again.

The Loonie was mixed.

The Euro is overbought against the USD.

The USD/JPY is at oversold levels.

And the U.S. Dollar (DXY) Index barely rose to break its 5 consecutive weeks of decline and it did drag it out of oversold territory.

The larger advancers over the past week comprised of;

Aluminium 1.4%, Baltic Dry Index 8.8%, Cocoa 13.2%, Cotton 2.5%, Lean Hogs 3.2%, Copper 2.1%, U.S. Midwest HRC 3.4%, Coffee 7.3%, Cattle 2.1%, Tin 4.4%, Robusta Coffee 2.3%, Sugar 2.2%, Uranium 2.4%, Silver in USD 1.8%, Oats 5.2%, Palm Oil 2.1%, All World Developed ex USA 2.5%, AEX 2.4%, AEX 3.7%, KBW Banks 5.7%, BUX 6.8%, CAC 3.4%, DAX 4.9%, DJ Industrials 2.5%, Egypt 1.9%, MIB 3.8%, HSCEI 2.3%, Hang Seng 2.7%, IBEX 3.4%, BOVESPA 3.9%, IDX 3.9%, S&P SmallCap 600 3.7%, Russell 2000 4.1%, TAIEX 2.5%, Nasdaq Composite 6.7%, KRE Regional Banks 4.9%, KOSPI 2.5%, FTSE 250 1.9%, S&P MidCap 400 3.1%, Mexico 7%, Nasdaq Biotechs 4.1%, Nasdaq 100 6.4%, Nikkei 225 2.8%, Stockholm 3%, PSI 2.2%, SMI 2.4%, SOX 10.9%, S&P 500 4.6%, IPSA & IGPA 2.2%, STI 2.8%, TSX 2.1%, FTSE 100 1.7%, WIG 5.3%, ASX Financials 2.8%, ASX 200 2.8%, IBB Biotech ETF 4.2% and XBI Biotech ETF rose 5.7%.

The group of largest decliners from the week included;

WTI Crude Oil (1.6%), JKM LNG (6.7%), JKM LNG in Yen (5.7%), Newcastle Coal (1.8%), Natural Gas (9.5%), Orange Juice (12.9%), Palladium (2.5%), Dutch TTF Gas (9%), Rice (2.1%) and Wheat fell 3.1%.

April 27, 2025

By Rob Zdravevski

rob@karriasset.com.au