Macro Extremes (week ending July 4, 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

Richards Bay Coal

COP/USD

Shanghai Composite *

Overbought (RSI > 70) 

Urea (U.S. gulf prices)

CHF/USD *

CHF/JPY

EUR/USD *

GBP/USD

Toronto’s TSX Index

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

Pakistan’s KSE Index 

South Korea’s KOSPI *

And the Tel Aviv 35 equity index *

Extremes below the Mean (at least 2.5 standard deviations)

U.S. 5 year bond yield minus U.S. 3 month bill yield spread

Arabica Coffee *

Oversold (RSI < 30)

U.S. (DXY) Index *

Lithium Carbonate *

Lithium Hydroxide *

Robusta Coffee *

CAD/CHF *

CAD/EUR *

HKD/USD *

USD/CHF *

USD/DKK *

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

None

Notes & Ideas:

Government bond yields were mixed.

Chilean 2 year and Russian 10 year bonds yield has fallen for 6 straight weeks.

China’s 10 year yields have declined for 5 weeks.

Norwegian 10’s are in a 4 week losing streak.

Last week’s bond yield spreads are no longer in todays list.

And the U.S. 2 year bond yields have reverted to a longer term mean reversion.

Equities had another good week.

Hong Kong based indices were the few which were lower.

Toronto’s TSX joins the Shanghai Composite in overbought territory.

The former has risen for 11 of the past 13 weeks.

South Korea’s KOSPI broke its 5 straight weeks of advance.

The Philadelphia SOX index is in a 6 week winning streak. 

Thailand’s SET index moved out from oversold territory.

Commodities were mixed, again, again, but plenty of streaks are developing.

Oils and Distillates along with Oats, Wheat, Soybeans and Precious Metals were the notable gainers.

Shipping Rates, Cocoa, Coffee, Gases, OrangeJuice and Rice dominated the losers category.

Tin broke its 4 week winning streak.

Lean Hogs broke its 5 weeks of advance.

Urea has climbed for 4 weeks and appears in this weeks overbought list.

Aluminium is in a 5 week winning streak.

Platinum has risen for 6 weeks straight.

Orange Juice has fallen or 5 weeks.

Sugar is in a 8 week losing streak.

Arabica is in a 4 week losing streak.

And Robusta Coffee rose and broke its 9 consecutive weeks of losses.

Currencies were active, again.

The big news is the U.S. Dollar (DXY) Index continues to appear in oversold territory.

And with that, comes a host of USD pairs registering extreme readings this week.

A new entrant is the Colombian Peso being overbought against the USD.

The Aussie and Loonie were subdued and mixed again.

Sterling and the USD were both weaker.

The AUD/EUR is in a 4 week losing streak.

Brazil’s Real is in a 5 week winning streak vs the USD.

The Euro has climbed for 6 weeks vs the Yen.

CAD/CHF is in a 4 week losing streak.

CHF/JPY has risen for 6 weeks.

And the Chinese Yuan has strengthened against the USD for 5 straight weeks.

The larger advancers over the past week comprised of;

Brent Crude 3%, WTI Crude 2.3%, Heating Oil 1.7%, Newcastle Coal 1.7%, Platinum 1.8%, Gasoline 2.4%, Shanghai Rebar 1.9%, Urea U.S. gulf prices 2.5%, Gasoil 10.4%, Silver in AUD 2.3%, Silver in USD 2.6%, Corn 2.1%, Oats 6.2%, Soybeans 2.4%, Wheat 3%, CSI 300 1.5%, KBW Banks 4.8%, BUX 1.7%, China A50 2.3%, DJ Industrials 2.3%, DJ Transports 3.6%, IBB biotech ETF 2.8%, BOVESPA 3.2%, S&P SmallCap 600 3.3%, Russell 2000 3.5%, Nasdaq Composite 1.6%, KRE Regional Banks 6.4%, KSE 6.1%, S&P MidCap 2.8%, NBI biotech ETF 3%, Nasdaq 100 1.5%, OBX 1.5%, SET 3.5%, SOX 1.8%, S&P 500 1.7%, TA35 4.4%, Nasdaq Transports 3.2%, XBI biotech ETF 2.7%, BIST 9.3% and ASX Materials Index rose 2.9%.  

The group of largest decliners from the week included;

Baltic Dry Index (5.6%), Cocoa (9.2%), Lean Hogs (4.7%), Arabica Coffee (4.7%), JKM LNG in Yen (1.8%), Natural Gas (8.8%), Orange Juice (3.3%), Sugar (2%), Uranium (2.1%), Rice (3.9%), HSCEI (1.8%) and the Hang Seng fell 1.5%. 

July 6, 2025

By Rob Zdravevski

rob@karriasset.com.au