Macro Extremes (week ending August 1st, 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)

USD/INR

CSI 300 * 

Shanghai Composite Index *

Overbought (RSI > 70) 

Cattle *

Urea (U.S. gulf prices) *

Urea (Middle East) prices *

Hungary’s BUX Index *

Pakistan’s KSE Index *

South Korea’s KOSPI *

Czechia’s PX Index

Tel Aviv 35 equity index *

Canada’s TSX *

Vietnam’s VN Index *

And Polands WIG equity index *

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

Spanish 10 year bond yields 

Extremes below the Mean (at least 2.5 standard deviations)

None

Oversold (RSI < 30)

Lithium Carbonate *

Lithium Hydroxide *

Robusta Coffee *

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

North European Hot Rolled Coil Steel *

Notes & Ideas:

Government bond yields mostly fell.

Australian yields are close to mean reverting.

The U.S. yields re already doing so and look like going lower.

U.K. yields are looking to do the same.

Indonesian 10 yer yield rose and broke a 5 week losing streak.

Indian 10’s have climbed for 4 weeks.

Russian 10 year bonds yield has fallen for 11 straight weeks.

The U.S. 30 year – 10 year bond yield spread is approaching overbought territory,

And the U.S. 5 year ‘real interest rate’ is the most oversold since July 2022.

Equities were weaker.

Many winning streaks were broken and some indices departed overbought territory.

The South Africa 40 and Singapore’s Strait Time were amongst the latter.

U.S. small and mid caps, banks along with the transports were amongst the notable losers 

Copenhagen’s main index suffered due to the downdraft in main weight, Novo Nordisk.

Hungary’s BUX fell and broke its 4 week winning streak.

Czechia’s main indices have risen for 5 weeks straight.

While Stockholm, Johannesburg, London, CSI 300 and the Shanghai Composite fell and saw their winning streak end at 5 weeks.

Karachi and Bangkok are in 6 week winning streaks.

Vietnam’s VN Index broke its 6 weeks of consecutive advance..

Oslo has fallen for 4 straight weeks.

While the Sensex and Nifty has fallen for 5 consecutive weeks.

Commodities were mainly lower.

Crude Oil, Lumber, Gold and LNG were the notable gainers.

Aluminium, Shipping Rates, Copper, Platinum, Diesel, Tin, Lithium and Grains dominated the losers category.

Copper, Orange Juice & Palladium drop out of overbought territory. 

Copper’s slump and Gold rise led to a large decline in the Copper/Gold Ratio.

U.S. Hot Rolled Coil Steel has risen for 4 weeks.

Cattle prices are in a 6 week winning streak.

Urea’s U.S. Gulf price has climbed for 8 straight weeks.

Inversely, Oats have fallen for the past 4 weeks.

JKM LNG rose and broke 5 straight weeks of decline

Base and Industrial metals look like going lower,

And Sugar is nearly oversold.

Currencies were active.

All currencies appearing in last week’s list of extremes have departed the scene.

The Aussie fell and the AUD/CHF is approaching oversold.

The Loonie was mixed.

The U.S. (DXY) Dollar rose 1% and has risen 2% overall since its recent oversold reading.

The Euro was weaker. 

GBP/EUR rose and broke a 4 week losing streak.

Overall, the Yen rose to match the risk-off mood.

Furthermore, the JPY/EUR rose and ended a 9 consecutive weeks of decline.

The Philippine Peso has fallen ro 4 weeks against the USD.

The U.S. Dollar is in a 5 week rising streak versus the Indian Rupee.

A prospective Long in the USD/BRL is attracting my attention,

In fact, many new U.S. Dollars long pair trades are shoring up.

The larger advancers over the past week comprised of;

Brent Crude Oil 3.1%, WTI Crude Oil 3.3%, Lumber 3.2%, LNG in Yen 6.8%, Gasoline 2.7%, Robusta Coffee 3.2%, Dutch TTF Gas 2.9%, Gold in AUD 2.3%, Gold in CHF 1.9%, Gold in EUR 2.1%, Gold in GBP 2%, Gold in ZAR 2.4%, ASX Financials 1.5% and ASX Industrials rose 1.3%.

The group of largest decliners from the week included;

Australian Coking Coal (2.1%), Aluminium (4.6%), Bloomberg Commodity Index (1.6%), Baltic Dry Index (10.6%), Cotton (2.7%), Copper (23%), Heating Oil (3.3%), Arabica Coffee (4.5%), Lithium Hydroxide (3%), Lithium Hydroxide (6.3%), Tin (5.9%), Natural Gas (3.3%), Nickel (2.3%), Orange Juice (27.1%), Palladium (2.9%), Platinum (7.4%), Iron Ore CFR China (2,7%), CRB Index (2.3%), Gasoil (4.7%), Silver in AUD (1.5%), Silver in USD (3%), Corn (2.5%), Oats (2.7%), Rice (2.9%), Soybean (3.1%), Wheat (4%), CSI 300 (1.8%), All World Developed ex USA (2.9%), AEX (2.3%), ATX (2.6%), KBW Banks (4.4%), CAC (3.7%), China A50 (2.3%), DAX (3.3%), DJ Industrials (3%), DJ Transports (7.7%), FCATC (2.8%), MIB (1.9%), HSCEI (3.8%), Hang Seng (3.5%), IBB biotechs (1.8%), S&P small caps 600 (3.9%), Russell 2000 (4.2%), Nasdaq Composite (2.2%), KRE Regional Banks (5%), KOSPI (2.4%), FTSE 250 (1.9%), S&P Midcaps 400 (3.5%), NBI biotechs (1.5%), Nasdaq 100 (2.2%), Nikkei 225 (1.6%), Copenhagen (8.6%), Helsinki (3%), Stockholm (2.8%), PSE (1.7%), SOX (2.1%), S&P 500 (2.4%), STI (2.5%), Nasdaq Transports (4.9%), TSX (1.7%), Vietnam (2.4%), WIG (2.6%), XBI biotech (1.9%) and the ASX Materials Index fell 3.9%.

August 3, 2025

By Rob Zdravevski

rob@karriasset.com.au