Macro Extremes (week ending May 30, 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)

Platinum *

Oats

MYR/USD *

THB/USD *

KOSPI

Overbought (RSI > 70) 

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

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

And Spain’s IBEX index *

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

Tel Aviv 25 Index

Extremes below the Mean (at least 2.5 standard deviations)

Robusta Coffee

Oversold (RSI < 30)

Indian 10 year government bond yield * 

Richards Bay Coal

Lithium Carbonate *

Lithium Hydroxide *

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

None

Notes & Ideas:

Government bond yields mostly fell.

Finnish, Danish and shorter duration Gilts bucked that trend.

All other remaining bond yields have departed extreme territory except for the Indian 10 year bond yield.

IEF and TLT rose and broke their 4 week losing streaks.

TBT & TBX eased lower and moved out of overbought territory.

Aussie yields spreads along with the U.S. 10 year yield minus U.S. 10 year inflation rate are nearly overbought.

Chinese & Korean 10 year bond yields along with Japanese 2’s are in a 4 week rising streak.

Italian 10 year bond yields have fallen for 4 straight weeks.

And the U.S. 5, 7, 10, 20 and 30 year yields broke their 4 week rising streaks.

Equities were generally firmer.

Although Asian markets were mostly weaker.

So much, that the HSCEI broke its 6 week wining streak and the Hang Seng ended its 7 weeks of advance.

Spain’s IBEX is in a 7 weeks winning streak and remains the only index in overbought territory.

And the All World Developed (ex USA) index has risen for 7 of the last 8 weeks.

Commodities had a lower bias.

The largest winners were Hogs, Orange Juice, Oats, Rice and Shipping Rates

The notable losers included Copper, Coffee, Precious Metals, Gases, Oils and Distillates.

Platinum is overbought while Gold in AUD and USD dropped out.

U.S. Hot Rolled Coil Steel is in a 4 week winning streak.

Robusta Coffee has fallen for 5 weeks.

Arabica Coffee has slumped 12% over the past 3 weeks, 

while Orange Juice has soared 32% since its oversold appearance 10 weeks ago.

And Richards Bay Coal retuned to being oversold.

Currencies were mixed.

The Aussie fell.

The Loonie eeked out some small gains as did the USD.

The Euro rose and the EUR/GBP broke 6 weeks of declines.

Sterling was mixed.

The Yen fell,

and the USD/ZAR broke its 7 weeks of decline.

The larger advancers over the past week comprised of;

Baltic Dry Index 5.8%, Lean Hogs 3.1%, U.S. HRC 2.4%, Orange Juice 4.4%, Oats 6.8%, Rice 2.5%, KBW Banks 1.5%, DJ Industrials 1.6%, Egypt 2.3%, MIB 1.6%, S&P SmallCap 600 1.3%, Russell 2000 1.2%, Nasdaq Composite 2%, KOSPI 4.1%, FTSE 250 1.5%, Nasdaq 100 2%, Nikkei 225 2.2%, SOX 1.2%, S&P 500 1.9%, TA35 4.2%, Nasdaq Transports 1.5%, WIG 1.6% and the ASX Financials rose 1.4%.

The group of largest decliners from the week included;

Rotterdam Coal (2.4%), Bloomberg Commodity Index (2.6%), Cotton (1.6%), Copper (3.3%), Heating Oil (3.5%), JKM LNG (2.6%), Arabica Coffee (5.1%), JKM LNG in Yen (3.7%), Tin (7.9%), Newcastle Coal (2.7%), Natural Gas (6.3%), Nickel (2.5%), Palladium (4.2%), Platinum (3.1%), Gasoline (2.9%), Robusta Coffee (6.9%), S&P GSCI (1.9%), Rubber (1.6%), CRB Index (2.1%), Dutch TTF Gas (6.4%), Urea U.S. Gulf (2.3%), Brent Crude (2.2%), Gasoil (2.1%), Silver in USD (1.5%), Gold in CAD (2%), Gold in CHF and EUR (1.9%), Gold in USD (2.1%), Corn (3.4%), Soybean (1.7%), Wheat (1.6%), China A50 (2.3%), IDX (1.7%), TAIEX (1.4%), KLSE (1.8%), SET (2.3%), IGPA (3.8%), IPSA (4.2%) and BIST fell 3.6%. 

June 1, 2025

By Rob Zdravevski

rob@karriasset.com.au