Macro Extremes (week ending July 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)

Baltic Dry Index

Heating Oil

Overbought (RSI > 70) 

Cattle *

Platinum *

Urea (U.S. gulf prices) *

CHF/JPY

Hungary’s BUX Index *

South Korea’s KOSPI *

Tel Aviv 35 equity index *

South Africa 40 equity index

Singapore’s Strait Times

Canada’s TSX

And Polands WIG equity index

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

Palladium *

Urea (Middle East) prices *

Pakistan’s KSE Index *

Vietnam’s VN Index

Extremes below the Mean (at least 2.5 standard deviations)

Cocoa (London price)

Rice

JPY/CAD

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 were mixed.

Canadian 10 year bond yields have climbed for 4 straight weeks.

Indonesian 10 year yields have fallen for 4 weeks.

Russian 10 year bonds yield has fallen for 8 straight weeks.

The RSI of the U.S. 10 year breakeven inflation rate is approaching a reading of 60.

U.S. 30 year minus U.S. 10 year yield spread are nearly overbought,

And the U.S. 10 year divided by Aussie 10 year yield is entering a new downtrend.

Equities were subdued and mostly stayed in a tight range.

Several more indices joined the overbought brigade this week.

Chinese indices were stronger along with Australian and other Asian indices.

There are some streaks developing too.

The Shanghai Composite and the CSI 400 have risen for 4 consecutive weeks.

Karachi, Jakarta, Turkiye’s BIST, FTSE 100, Singapore’s STI, the ASX Materials, Toronto’s TSX and Thailand’s SET are in 4 week winning streaks.

The TSX has climbed for 12 of the past 15 weeks and advanced 18% over that time.

While the SET has soared 13% over the past 4 weeks.

Vietnam’s VN Index has climbed for the past 5 weeks.

Meanwhile, Israel’s TA35 fell and broke its 4 week rising streak.

And the Philadelphia SOX index is in a 8 week winning streak. 

Commodities were mixed, again, again.

Shipping Rates, Coffee, Natural Gas, Orange Juice, Rubber and Corn were the notable gainers.

Coal, Cocoa, LNG Gas and Rice dominated the losers category.

Richards Bay Coal gave up all of the previous weeks gains.

Palm Oil has risen 6% in the past fortnight, which is 10 times more than Gold’s performance.

The Baltic Dry Index is showing some life recently.

Cattle has risen for 4 straight weeks.

Rubber and Iron Ore are in 5 week winning streaks.

Urea has climbed for 6 consecutive weeks.

Platinum eased a little and thus broke its 6 week winning streak.

Orange Juice soared 42% over the past fortnight.

Australian Coking Coal looks like establishing a floor.

Arabica Coffee rose and broke its 5 week losing streak.

And Rice has fallen for 5 weeks.

Currencies were active.

Many currencies have left their extremes this week.

The Aussie fell.

Moreover, the AUD/JPY fell and broke a 4 week rising streak.

The Loonie rose and so the CAD/CHF broke its 5 weeks of declines.

The CHF/JPY and EUR/JPY are in 8 week winning streaks.

Broadly, the Yen was weaker.

The Euro rose against all except the USD.

The British Pound was mixed.

The larger advancers over the past week comprised of;

Baltic Dry Index 23.4%, Palm Oil 3%, Lean Hogs 1.7%, Arabica Coffee 6%, Lithium Carbonate 1.6%, Henry Hub Natural Gas 7.6%, Orange Juice 10.3%, Palladium 1.5%, Robusta Coffee 4.1%, Sugar #16 2.3%, Rubber 3.7%, Gasoil 2%, Corn 3.2%, Soybean 2.8%, Egypt 1.5%, IDX 3.7%, FCATC 4.6%, HSCEI 3.4%, Hang Seng 2.8%, TAEIX 2.8%, Nasdaq Composite 1.5%, KSE 3.2%, SA40 1.8%, SET 7.6%, STI 2.5%, Vietnam 2.7%, WIG 3.2%, ASX Financials 1.6%, ASX 200 2.1%, ASX Industrials 1.9% and the ASX Small Caps rose 3.2%.

The group of largest decliners from the week included;

Richards Bay Coal (2.7%), Rotterdam Coal (3.8%), Brent Crude (1.5%), Cocoa (4.6%), WTI Crude Oil (1.6%), JKM LNG (5.3%), LNG in Yen (1.8%), Tin (1.7%), Newcastle Coal (3.8%), Dutch TTF Gas (5.5%), Oats (1.5%), Rice (3.3%), DJ Transports (2.1%), BOVESPA (2.1%), PSE (2.4%) and the TA-35 fell 1.6%.

July 20, 2025

By Rob Zdravevski

rob@karriasset.com.au

Taking the markets temperature – July 2025 edition

My latest newsletter can be read here;

https://mailchi.mp/karriasset/taking-the-markets-temperature-july-2025

Full but odds of a melt-up are increasing

The Morgan Stanley Capital International All Country World Index is trading at levels which make me pay attention to an impending peak.

The MSCI ACWI is described as capturing large and mid cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. With 2,528 constituents, the index covers approximately 85% of the global investable equity opportunity set.

Sadly, also according to its fact sheet, the index’s top 10 holding account for 23% of the total constituents weight.

However, the odds of a ‘melt-up’ is increasing.

Funnily, the term ‘melt-up’ is often used at the upper end of an existing advance, so I say, just be aware what time it is at the current party.

July 12, 2025

rob@karriasset.com.au

Heard it somewhere, this week…..

A money manager was criticised by peers for owning shares in companies which make alcoholic beverages.

The criticiser based their revolt on alcohol part in how many personal relationships it has ruined.

The money manager rebutted with, “but just think how many relationships alcohol has helped start”.

#analysis #research

Gravity in gold miners taking hold

ASX listed Gold Mining company, Evolution Gold was the ‘mystery’ stock mentioned in the linked article.

A month on, gravity it taking hold on EVN.AX stock price.

We are seeing commensurate price action in another listed peer, being Northern Star Resources.

Observe the longer term mean lurking below.

July 7, 2025

rob@karriasset.com.au

Another signal saying ‘stay long’ equities

Keep Calm and Carry On.

The U.S. ISM Purchasing Managers Index is not yet telling me to reduce allocations to equities.

July 6, 2025

rob@karriasset.com.au

AUD/USD nearing a peak

The U.S. Dollar (DXY) Index is registering some oversold extremes and so many reciprocal currency pairs are overbought and reaching their momentary peaks.

The Aussie Dollar is close to doing the same.

That John Deere tractor should be a little more cheaper than it was 5 months ago and it’s nearly time to sell AUD and Buy USD if you need to pay for that new helicopter.

July 5, 2025

rob@karriasset.com.au

Expecting Platinum to pause & retreat

The recent 30% run in Platinum has reached a point of needing a rest.

July 4, 2025

rob@karriasset.com.au