Macro Extremes (week ending December 20, 2024)

December 22, 2024 Leave a comment

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.

* denotes multiple week inclusion

Extremes above the Mean (at least 2.5 standard deviations)

U.S. 5 year bond yield minus the U.S. 5 year breakeven inflation rate

U.S. 10 year bond yield minus the Australia’s 10 year bond yield *

U.S. 10 year bond yield divided by Australia’s 10 year bond yield *

Natural Gas

CHF/AUD

GBP/AUD *

Overbought (RSI > 70)

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

Arabica coffee *

RMB/USD *

Pakistan’s KSE Index *

Czech Republic’s PX Index *

Israel’s TA35 *

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

Brazil 10 year government bond yield

Orange Juice

Extremes below the Mean (at least 2.5 standard deviations)

Australian 10 year bond yield minus the U.S. 10 year bond yield *

Rice

AUD/CHF

AUD/GBP

AUD/IDR

AUD/INR

AUD/SGD

AUD/USD

IDR/USD

Bovespa

Nasdaq Biotech Index

Swiss SMI

FTSE 100

Oversold (RSI < 30)

U.S. 3 month government bill yield *

Australian Coking Coal *

U.S. Midwest Hot Rolled Coil Steel *

North European Hot Rolled Coil Steel *

Lithium Carbonate *

Lithium Hydroxide *

Newcastle Coal *

AUD/THB *

KRW/USD

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

Chinese 10 year government bond yields *

BRL/USD

CAD/USD

INR/USD *

Copenhagen’s OMX 25 Index

Notes & Ideas:

Government bond yields rose again, leaving those recently oversold as a memory.

Only a few fell such as those in Belgium and Finland.

Brazilian 10’s have risen for 7 weeks.

Chinese yields have declined for 6 consecutive weeks.

Korean 10’s are not oversold anymore.

The U.S. 10 minus Euro 10 spread is nearly overbought.

The U.S. 5 year ‘real interest rate’ is overbought. The 10 year version is close to being so too.

And as pre-empted in last week’s edition, the U.S. 5 year minus U.S. 3 month bill spread is overbought this week.

Equities were weaker, adding to last week’s general weaker bias.

U.S. small and mid caps got hit the hardest.

The Nasdaq Composite and 100 broke their 4 week rising streak. Both also performed a bearish outside reversal week. 

Chile’s stock market broke its 5 straight weeks of advance.

Pakistan’s KSE snapped its 8 week winning streak.

The KBW Banking Index has fallen 8% in the past 3 weeks since its recent overbought extreme.

The Regional Banks (KRE) Index and Oslo’s OBX Index are in 4 week losing streaks.

Helsinki’s OMX Index has fallen for 10 of the past 12 weeks.

The Dow Jones Transports has sunk 10% over the past 3 weeks.

Indonesia’s IDX is nearly oversold.

And Czechia’s PX Index is among the rare advancers for the week.

Commodity prices were mostly weaker.

Only Cocoa, Orange Juice, Gases and Lumber were amongst the notable gainers.

The latter broke its 5 week losing streak.

The extensive list of decliners appear below.

Aluminium and JKM LNG (in Yen) are in 4 week losing streaks.

The Baltic Dry Index and Uranium have fallen for 5 consecutive weeks.

Inversely, Lean Hogs and Cocoa have risen for 5 and 6 straight weeks, respectively. 

Soybeans are nearly oversold.

U.S.Midwest Hot Rolled Coil Steel has spent 30 weeks being oversold,

while Lithium Hydroxide has now lingered in weekly oversold territory for 81 consecutive weeks.

Currencies were active, again.

The Aussie was weaker and it features in this weeks list of extremes.

It has fallen for 4 consecutive weeks versus the USD.

The Loonie was also weaker. It’s now oversold versus the USD.

The Swiss was firmer as was the Euro.

The British Pound also saw strength against all except the USD.

Japan’s Yen softened. 

ZAR/USD broke its streak of 4 consecutive weeks of gains. 

And the NZD/USD has fallen for 10 of the past 12 weeks.

The larger advancers over the past week comprised of;

Cocoa 5.8%, JKM LNG 4.4%, Lumber 5.4%, Natural Gas 14.3%, Orange Juice 3.1% and Dutch TTF Gas rose 7.1%.

The group of largest decliners from the week included;

Aluminium (1.6%), Baltic Dry Index (5.8%), Brent Crude (1.9%), WTI Crude (2%), Cotton (1.8%), Copper (2.3%), Heating Oil (1.6%), Cattle (1.9%), Tin (3.6%), Newcastle Coal (2.6%), Nickel (2%), Palladium (4.4%), Gasoline (2.9%), Robusta Coffee (3.8%), Sugar (2.7%), Gasoil (2%), Uranium (4.8%), Silver in AUD (1.7%), Silver in USD (3.4%), Oats (4.8%), Rice (6.3%), Wheat (3.5%), All World Developed ex USA (3.6%), AEX (2%), KBW Banks (3.4%), BUX (l.8%), CAC (1.8%), DAX (2.6%), DJ Industrials (2.5%), DJ Transports (4.9%), MIB (3.2%), IBEX (2.4%), BOVESPA (2%), IDX (6.1%), S&P SmallCap 600 (5.7%),Russell 2000 (4.8%), TAEIX (2.2%), Nasdaq Composite (1.8%), KRE Regional Banks (6.1%), KSE (4.2%), KOSPI (3.6%), FTSE 250 (2.1%), S&P MidCap 400 (4.9%), Mexico (3.9%), Nasdaq Biotech (2.6%), Nasdaq 100 (2.6%), Nikkei 225 (2%), NIFTY (4.8%), Oslo (3.1%), Copenhagen (5.1%), Helsinki (2.4%), Stockholm (3.2%), PSE (3.2%), SA40 (3.3%), SENSEX (5%), SET (4.7%), SMI (2.7%), SOX (3.6%), S&P 500 (2%), STI (2.4%), Nasdaq Transports (4.5%), TSX (2.7%), FTSE (2.6%), WIG (2.6%), BIST (4%), ASX Financials (3.4%), ASX 200 (2.8%), ASX Materials (4.8%) and the ASX Small Caps fell 3%.

December 22, 2024

By Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , ,

Macro Extremes (week ending December 13, 2024)

December 15, 2024 Leave a comment

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.

* denotes multiple week inclusion

Extremes above the Mean (at least 2.5 standard deviations)

Finnish 10 year government bond yields *

U.S. 10 year bond yield minus the Australia’s 10 year bond yield

U.S. 10 year bond yield divided by Australia’s 10 year bond yield *

GBP/AUD *

Overbought (RSI > 70)

Brazilian 10 year government bond yield *

Hungary’s BUX Index *

Germany’s DAX Index

Czech Republic’s PX Index *

Singapore’s STI Index

Israel’s TA35 *

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

Cocoa *

Arabica Coffee *

Pakistan’s KSE Index *

Extremes below the Mean (at least 2.5 standard deviations)

Austrian, Danish, Spanish, Italian and Portuguese government bond yields *

Australian 10 year bond yield minus the U.S. 10 year bond yield

Newcastle Coal *

AUD/SGD *

AUD/ZAR

Oversold (RSI < 30)

U.S. 3 month government bill yield *

Australian Coking Coal *

U.S. Midwest Hot Rolled Coil Steel *

North European Hot Rolled Coil Steel *

Lithium Carbonate *

Lithium Hydroxide *

CAC/USD

Chinese Renminbi 

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

Chinese & South Korean 10 year government bond yields *

AUD/THB

AUD/GBP

INR/USD *

Notes & Ideas:

Government bond yields rose for a change.

Only a few fell such as those in Japan and South Korea.

Belgium 10’s snapped their 5 week run of rising yields.

Brazilian 10’s have risen for 6 weeks.

Chinese yields have declined for 5 consecutive weeks.

Danish, Spanish, French Italian, Dutch, Norwegian and Portuguese 10’s bore their 5 week declining streak.

U.S. break-even inflation rates rose.

And the U.S. 5 year minus U.S. 3 month bill spread is nearing an overbought reading.

Equities were mixed, with a lower bias.

The Nasdaq Composite and 100 have climbed for 4 consecutive weeks.

Chile’s stock market has risen for 5 straight weeks.

While the KSE has risen for 8 straight weeks.

Toronto’s TSX and the U.S. KBW Bank Index departed overbought territory.

Australia’s Industrials Index snaps its 5 week advance.

And the DAX makes an overbought extreme.

Commodity prices were mixed.

Gold, Oil, Petroleum and most Gases rose.

JKM LNG and Dutch TTF Gas prices fell.

Sugar, Lumber and Coffee tool a breather.

The Baltic Dry Index is in a 4 week losing streak, declining 50% over that time. It is now at its lowest point since mid-July 2023.

Cocoa makes a return to the overbought tables, rising for the past 5 weeks.

Inversely, Lumber has slumped for 5 consecutive weeks. 

Arabica coffee broke its 5 week winning streak.

U.S.Midwest Hot Rolled Coil Steel has spent 29 weeks being oversold,

while Lithium Hydroxide has now lingered in weekly oversold territory for 80 consecutive weeks.

Currencies were active.

While the Aussie was mixed, it rose 1.9% against the Yen.

The AUD is no oversold against the SGD, ZAR and Thai Baht.

The Loonie was weaker, again. It’s now oversold versus the USD.

BRL/USD is no longer oversold.

And the Yen fell.

The larger advancers over the past week comprised of;

Brent Crude Oil 4.5%, WTI Crude Oil 6.1%, Heating Oil 6.3%, Cattle 3.1%, Natural Gas 6.6%, Orange Juice 1.8%, Gasoline 4.9%, S&P GSCI 2.8%, CRB Index 2.7%, Urea U.S. Gulf 2.5%, Gasoil 7.6%, Gold in CHF 2.2%, Gold in GBP 1.5%, Oats 2.6%, ATX 1.8%, KSE 4.8%, KOSPI 2.7%, PX 2.1%, Chile’s IPSA 1.8% and the SOX rose 1.8%.

The group of largest decliners from the week included;

Baltic Dry Index (19.4%), U.S. Hot Rolled Coil Steel (2%), JKM LNG (3.5%), Coffee (3.3%), Lumber (5%), LNG JKM in Yen (7.6%), Sugar (5%), Dutch TTF Gas (11.3%), CSI 300 (1%), All World Developed ex USA (1.5%), KBW Index (2.9%), DJ Industrials (1.7%), IBEX (2.7%), Russell  2000 (2.5%), KRE Regional Bank Index (2.7%), S&P MidCap 400 (1.5%), Nasdaq Biotech Index (4%), Helsinki (1.8%), Stockholm (2.2%), PSE (1.7%), SET (1.4%), S&P 500 (0.6%), Nasdaq Transports (2.6%), TSX (1.6%), WIG (1.5%), ASX Financials (2%), ASX 200 (1.5%), ASX Industrials (2%) and the ASX Small Caps fell 2.3%.

December 15, 2024

By Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , ,

Macro Extremes (week ending December 6, 2024)

December 8, 2024 Leave a comment

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.

* denotes multiple week inclusion

Extremes above the Mean (at least 2.5 standard deviations)

Finnish10 year government bond yields 

U.S. 10 year bond yield divided by Australia’s 10 year bond yield

AUD/GBP

AUD/SGD

Overbought (RSI > 70)

Japanese 2 year government bond yield

Brazilian 10 year government bond yield *

Cocoa * 

USD/INR *

KBW Bank Index *

Hungary’s BUX Index *

Czechia’s PX Index *

Singapore’s STI Index

Israel’s TA35 *

Toronto’s TSX *

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

Arabica Coffee *

Pakistan’s KSE Index *

Hungary’s BUX Index *

Extremes below the Mean (at least 2.5 standard deviations)

Austrian, Swiss, Danish, Spanish, Greek, Dutch and Italian government bond yields *(

Newcastle Coal

Oversold (RSI < 30)

U.S. 3 month government bill yield *

Australian Coking Coal *

U.S. Midwest Hot Rolled Coil Steel *

North European Hot Rolled Coil Steel *

Lithium Carbonate *

Lithium Hydroxide *

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

Chinese & South Korean 10 year government bond yields

BRL/USD *

Notes & Ideas:

Government bond saw much action as most yields fell, again.

Only a few rose.

There are may streaks developing in bond yields.

Belgium 10’s have risen for 5 straight weeks.

Brazilian 10’s have done so for 4 weeks.

Chinese and Norwegian yields have declined for 4 consecutive weeks.

Danish, Spanish, French Italian, Dutch and Portuguese 10’s have fallen for 5 weeks in a row.

EU and British yields broke their 4 weeks of declines.

Japanese 2’s snapped their 5 week fall. 

U.S. break-even inflation rates have declined to their lowest in 5 weeks.

Spanish 10 year yields are at their lowest since November 2022

While Danish 10’s yields are at their lowest since August 2022.

Equities were mostly firmer, again.

Some ‘lesser’ U.S. indices fell and are longer overbought.

In fact, many of last week’s overbought entrants have departed.

While the KSE has risen for 7 straight weeks.

Helsinki’s OMX 25 and the CAC broke their 6 week losing streaks.

Indonesia’s main index had an outside bullish outside several week.

Australia’s Industrials Index has advanced for the past 5 weeks.

And the DAX is a whisker from an overbought extreme.

Commodity prices were mixed.

Coffee, Cocoa, Silver and Grain rose.

Oil, Gas, Coal, Lumber, Lithium, Cotton, Palladium, Platinum and most Gold fell.

Only Gold as priced in AUD and CAD rose.

Arabica coffee is in a 5 week winning streak.

While Oats and Sugar broke their 4 and 9 week losing streaks.

The Baltic Dry Index has fallen 40% over the past 3 weeks.

U.S.Midwest Hot Rolled Coil Steel has spent 28 weeks being oversold,

while Lithium Hydroxide has now lingered in weekly oversold territory for 79 consecutive weeks.

Currencies were subdued.

All of the currency pairs appearing as extremes last week, are no longer so.

The Aussie and Loonie were weaker, again.

The Euro rose 1.8% against the AUD.

The EUR/JPY broke its 4 straight weeks of declines.

The Yen was mixed while the Swiss saw strength, again.

Is this huddling into the CHF pre-cursor for ‘risk-off’ in equities?

The Brazilian Real fell to a new low against the USD.

And the British Pound was firmer.

The larger advancers over the past week comprised of;

Cocoa 4.5%, Arabica Coffee 3.8%, Tin 3.4%, Sugar 3.5%, Silver in AUD 3.3%, Gold in AUD 1.5%, Corn 1.6%, Wheat 1.7%, Shanghai Composite 2.3%, BUX 1.6%, CAC 2.7%, DAX 3.9%, Egypt 2%, MIB 4%, HSCEI 2.7%, Hang Seng 2.3%, IBEX 3.7%, IDX 2%, TAIEX 4.2%, Nasdaq Composite 3.3%, KSE 7.6%, Mexico 3.1%, Nasdaq 100 3.3%, Nikkei 2.3%, Nifty 2.3%, Helsinki 2.3%, Stockholm 4%, PSI 1.7%, PX 1.9%, SA40 3%, Sensex 2.4%, SET 1.7%, SOX 2.7%, S&P 500 1%, TA35 2.7%, BIST 4.4% and Poland’s WIG rose 4.4%.

The group of largest decliners from the week included;

Rotterdam Coal (4.1%), Baltic Dry Index (13.8%), Brent (2.1%), Cotton (2.5%), Heating Oil (2.7%), Lumber (3.5%), Lithium Carbonate (4.3%), Lithium Hydroxide (1.9%), Newcastle Coal (4.7%), Natural Gas (8.5%), Palladium (3%), Platinum (2.1%), Dutch TTF Gas (2.8%), Gasoil (4.3%), KBW Bank Index (1.8%), DJ Transports (4.2%), S&P Small Cap 600 (1.6%), KRE Regional Bank (1.7%) and Nasdaq Transport Index (3%).

December 8, 2024

By Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , ,

Macro Extremes (week ending November 29, 2024)

November 30, 2024 Leave a comment

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.

* denotes multiple week inclusion

Extremes above the Mean (at least 2.5 standard deviations)

Cocoa *

CAD/EUR *

Dow Jones Transport Index

S&P Small Cap 600

Russell 2000

S&P Mid Cap 400

Overbought (RSI > 70)

USD/INR

KBW Bank Index *

Dow Jones Industrials 

Pakistan’s KSE Index *

Czechia’s PX Index *

Israel’s TA35 *

Nasdaq Transports Index *

Toronto’s TSX *

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

Brazilian 10 year government bond yields

Arabica Coffee *

Hungary’s BUX Index *

KRE Regional Banks Index *

Extremes below the Mean (at least 2.5 standard deviations)

Austrian, Swiss, Danish, Spanish, Greek and Italian government bond yields

BRL/USD

CAC Index

Oversold (RSI < 30)

U.S. 3 month government bill yield *

Australian Coking Coal *

U.S. Midwest Hot Rolled Coil Steel *

North European Hot Rolled Coil Steel *

Lithium Carbonate *

Lithium Hydroxide *

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

South Korean 10 year government bond yields

Notes & Ideas:

Government bond saw much action as most yields fell.

Only Brazilian and Finnish yields rose.

The former appears as an overbought extreme and the latter is in a 4 week rising streak.

Chilean & U.S. 2’s broke their 5 consecutive weeks of advance.

EU yields have declined for 4 weeks, across the curve.

British 2, 3 and 5 bond yields have declined for 4 consecutive weeks.

Japanese 2’s have risen for 5 straight weeks and for 8 of the past 9.

U.S. break-even inflation rates have declined to their lowest in 5 weeks.

Spanish 10 year yields are at their lowest since November 2022

While Danish 10’s yields are at their lowest since September 2022.

Equities were mostly firmer.

Some of the emerging market indices were weaker.

Helsinki and the CAC are in 6 week losing streaks.

While the KSE has risen for 6 straight weeks.

A bunch of U.S. indices appear in this weeks overbought extreme list.

The TAIEX posted a bearish outside reversal week.

Australia’s Industrials Index has advanced for the past 4 weeks

And the Nasdaq Biotech Index has recovered half of the 10% drop seen 3 weeks prior.

Commodity prices were mostly weaker, reversing last weeks strength.

Precious Metals, Oil, Gas and Wheat prices fell, giving up last week’s gains.

Arabica coffee is in a 4 week winning streak.

Oats, Shanghai Rebar and Sugar are in their respective 4, 7 and 9 week losing streaks. 

JKM LNG in Yen and other gas prices aren’t overbought anymore nor is the Copper/Gold Ratio.

The Baltic Dry Index has fallen 26% over the past fortnight.

U.S.Midwest Hot Rolled Coil Steel has spent 27 weeks being oversold,

while Lithium Hydroxide has now lingered in weekly oversold territory for 78 consecutive weeks.

Currencies were active again, again.

All of the currency pairs appearing as extremes last week, are no longer so.

The DXY Index broke its 8 week rising streak.

The Aussie was mostly weaker. It fell 3% against the Yen.

The Brazilian Real fell to a new low against the USD.

The Loonie was weaker.

The world huddled into the Swiss Franc. It broke a 6 week losing streak against the USD and the CHF/AUD posted a bullish outside reversal week. 

The Yen rose.

The Swedish Krona and Chinese Yuan both rose and broke their 6 week losing streak vs. the USD.

The GBP also rose against the USD, bringing its 8 consecutive weeks of declines, to an end.

While the EUR/JPY has fallen for 4 straight weeks, the EUR/USD isn’t oversold anymore.

The larger advancers over the past week comprised of;

Cotton 1.6%, Hot Rolled Coil Steel 4.3%, Arabica Coffee 5.3%, Natural Gas 5%, Robusta Coffee 8.5%, Iron Ore 2.7%, Rubber 1.8%, Shanghai 1.8%, All Developed World ex-USA 1.6%, DAX 1.6%, Dow Jones Industrials 1.6%, KSE 3.6%, Nasdaq Biotech 2.5%, S&P 500 1.2%, Nasdaq Transports 1.8%, Vietnam 1.8% and the ASX Small Caps rose 1.9%.

The group of largest decliners from the week included;

Baltic Dry Index (11.9%), Brent (4%), Cocoa (3.7%), WTI Crude Oil (4.6%), DXY Index (1.6%), Heating Oil (4%), JKM LNG in Yen (5.9%), Tin (1.9%), Newcastle Coal (3.6%), Palladium (2.9%), Platinum (2.2%), Gasoline (5.8%), Cane Sugar (3.7%), S&PGSCI (2.1%), Gasoil (3%), Silver in AUD (2.7%), Silver in USD (2.3%), Gold in AUD (2.8%), Gold in CAD (2.3%), Gold in CHF (3.9%), Gold in EUR (3.9%), Gold in GBP (4%), Gold in USD (2.4%), Oats (3.4%), Wheat (3%), BUX (2%), Bovespa (2.7%), TAIEX (2.8%), PSI (2.5%) and the KOSPI fell 1.8%.

November 30, 2024

By Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , ,

Gold bugs are quiet lately

November 13, 2024 Leave a comment

It is often noisiest at the extremes.

This Gold Miners ETF has fallen 15% over the past 4 weeks.

Surely, Gold’s sheer weight aids to the gravitational pull?

November 13, 2024

rob@karriasset.com.au

Screenshot

Filed under Finance & Investment Tagged with , ,

Overbought Aussie real rates is a rare moment

November 11, 2024 Leave a comment

Australian real interest rates may soon register the 4th occurrence of a monthly overbought reading from over the past 35 years.

I have expressed this observation by showing the Australian 2 year bond yield minus the Aussie inflation rate.

Client will receive a note very soon about what this is telling me.

November 11, 2024

rob@karriasset.com.au

Screenshot

Filed under Finance & Investment Tagged with , ,

Macro Extremes (week ending November 8, 2024)

November 10, 2024 Leave a comment

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.

* denotes multiple week inclusion

Extremes above the Mean (at least 2.5 standard deviations)

Australian 10 year minus U.S. 10 year government bond yield spread

British 3, 5 and 10 year government bond yields *

Japanese 2 year bond yields

Norwegian, Swedish and Turkish 10 year bond yields

Lumber *

Dow Jones Transports

S&P SmallCap 600

Russell 2000

KRE Regional Banks Index 

S&P MidCap 400

Overbought (RSI > 70)

Gold as priced in AUD, CAD, CHF, EUR, GBP and USD *

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

Lean Hogs

KBW Bank Index

Hungary’s BUX Index

Pakistan’s KSE *

Czechia’s PX Index

Israel’s TA35

Nasdaq Transportation Index

Extremes below the Mean (at least 2.5 standard deviations)

US10Y – AU10Y spread

Rice

RMB/USD

Copenhagen

Oversold (RSI < 30)

U.S. 3 month government bill yield *

Australian Coking Coal *

U.S. Midwest Hot Rolled Coil Steel *

North European Hot Rolled Coil Steel *

Lithium Carbonate *

Lithium Hydroxide *

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

None

Notes & Ideas:

Global government bond yields fell, taking a breather from the recent climb.

Japanese, Norwegian, Kiwi, Swedish 10’s and U.S. 2’s bucked this trend. 

5 weeks of higher yields in Australia came to an end.

Russian 10’s fell 88 basis points. Was this rally related to a Trump election win?

U.S. 10 year breakeven inflation rate mean reverted, upwards.

The U.S 30 year minus U.S. 10 year spread has fallen for 4 straight weeks.

The U.S. 10 year vs Euro 10 year spread yield broke its 7 week rising streak.

as did the U.S. 10 year bond yield minus the U.S. 10 year inflation breakeven rate.

U.S. 3 month bills are yielding their lowest since mid-March 2023.

And U.S. 2’s are their highest weekly close in 3 months…

soon I’ll look for yields to move lower.

Equities soared.

The Hang Seng and HSCEI broke their 4 week losing streaks.

Mexico rose to erase half of its past fortnight of declines to also post a bullish outside reverse week.

Scandinavian indices were amongst the few which fell for week.

Italy, Spain and FTSE 100 also fell.

Commodity prices most firmer.

Energy, Base Metals and Grains were stronger.

Precious metals were weaker with Palladium and Silver dropping the most.

Uranium, Pork, Urea and Oats also slumped.

As such, Lean Hogs aren’t overbought anymore.

Lithium Carbonate rose.

The Baltic Dry Index and Robust Coffee broke their 5 week falling streak.

Last week, Cattle and Platinum both posted a bearish outside reversal week. They duly fell this week.

Sugar have fallen for 5 straight weeks.

Rice have sunken for 7 consecutive weeks.

U.S.Midwest Hot Rolled Coil Steel has spent 24 weeks being oversold.

And Lithium Hydroxide has now lingered in weekly oversold territory for 69 consecutive weeks.

Currencies were fairly subdued.

The DXY Index is at its highest close in 4 months and is in a 5 week rising streak.

The Aussie rose and broke many 4 week losing streaks across various pairs.

The Loonie also rose and also broke its 5 week losing streak against the USD.

The CAD/EUR, USD/JPY and USD/KRW all posted a bullish outside reversal week.

The Swiss France and Japanese Yen fell.

The CHF/USD is in a 4 week losing streak.

The Colombian Peso isn’t oversold against the USD anymore.

EUR/USD had a bearish otiose reversal week as the Euro was generally weaker.

USD/CNH and the USD/SEK have climbed for 4 consecutive weeks.

And the GBP/AUD broke its 4 week winning streak.

The larger advancers over the past week comprised of;

Baltic Dry Index 8.5%, Brent Crude 1.5%, Coffee 4.5%, Lithium Hydroxide 5.6%, Tin 1.8%, Nickel 2.8%, Gasoline 2.3%, Robusta 2.3%, Dutch TTF Gas 8.3%, Corn 4%, Soybeans 3.7%, Shanghai 5.5%, CSI 300 5.5%, KBW Banks 8.4%, Budapest 3.2%, China A50 1.5%, Dow Jones Industrials 4.7%, Dow Jones Transports 6.1%, Egypt 2%, S&P SmallCap 600 8.7%, Russell 2000 8.7%, TAIEX 3.4%, Nasdaq Composite 5.7%, KRE Regional Banks 2.7%, S&P MidCap 400 6.3%, Mexico 2.4%, Nasdaq Biotechs 4.1%, Nasdaq 100 5.4%, Nikkei 225 3.8%, SOX 5.8%, S&P 500 4.7%, STI 4.8%, Nasdaq Transports 8.9%, TSX 2.1%, WIG 3.4%, ASX Financials 3.6%, BIST 3.4%, ASX Industrials 3.7% and the ASX 200 rode 2.2%.

The group of largest decliners from the week included;

Cocoa (1.4%), North European Hot Rolled Coil Steel (2.1%), Lean Hogs (4.3%), Copper (1.5%), Orange Juice (4.5%), Palladium (10.5%), Platinum (2.4%), Urea U.S. Gulf (2%), Urea Middle East (3.4%), Uranium (2.4%), Silver in AUD (3.9%), Silver in USD (3.5%), Gold in AUD (2.3%), Gold in CAD (2.2%), Gold in GBP (1.9%), Gold in USD (1.9%), Gold in ZAR (2.4%), Oats (9.5%), Rice (3%), MIB (2.5%), IBEX (2.5%), IDX (3.1%), Copenhagen (2.8%), PSI (2.3%) and the FTSE 100 fell 1.3%.

November 10, 2024

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , ,

Macro Extremes (week ending November 1, 2024)

November 3, 2024 Leave a comment

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.

* denotes multiple week inclusion

Extremes above the Mean (at least 2.5 standard deviations)

British 2, 3, 5 and 10 year government bond yields

Lumber

Overbought (RSI > 70)

U.S. 10 year bond yield minus the U.S. Inflation Rate (YoY) *

Gold as priced in AUD, CAD, CHF, EUR, GBP USD & ZAR *

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

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

U.S. 5 year bond yield minus U.S. Inflation Rate (YoY)

Lean Hogs

Pakistan’s KSE *

Extremes below the Mean (at least 2.5 standard deviations)

BRL/USD

Copenhagen

Oversold (RSI < 30)

U.S. 3 month government bill yield *

Australian Coking Coal *

U.S. Midwest Hot Rolled Coil Steel *

North European Hot Rolled Coil Steel *

Lithium Carbonate *

Lithium Hydroxide *

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

Colombian Peso vs USD

Notes & Ideas:

Global government bond yields rose, again.

Australian yields have risen for 5 consecutive weeks.

The U.S. 10 year vs Euro 10 year spread yield has climbed for 7 straight weeks,

as has the U.S. 10 year bond yield minus the U.S. 10 year inflation breakeven rate.

U.S. 3 month bills are yielding their lowest since mid-March 2023.

U.S. 2’s are their highest weekly close in 3 months.

The U.S. 10 year bond yield has risen for 5 of the past 7 weeks.

And the Aussie yield curve is nearly overbought.

Equities were weaker, again.

The Hang Seng and HSCEI are in 4 week losing streaks.

The Nasdaq Compose broke its 7 week winning streak while also performing a bearish outside reversal.

Mexico’s main index has declined 4.5% over the past fortnight.

The ASX Materials index along with India’s Nifty and Sensex all broke their 4 week losing streak. 

And Oslo’s OBX and Stockholm’s OMX30 both posted a weekly bearish outside reversal.

Commodity prices were weaker.

Energy prices saw weakness with gas prices having a shocker.

Palladium and Silver dropped out from overbought status.

This week, they dropped 8% and 3% respectively.

The Baltic Dry Index and Robusta Coffee have fallen for 5 straight weeks. 

The former has fallen 40% over the past 4 weeks.

Copper broke its 4 week streak of declines, by only a whisker.

Lean Hogs have climbed for 5 weeks.

Cocoa recovered last weeks decline.

Cattle and Platinum both posted a bearish outside reversal week.

Nickel and Sugar have fallen for 4 straight weeks. The former may re-test recent lows.

Robusta Coffee and Rice have sunken for 5 and 6 consecutive weeks, respectively.

Gold was subdues, while Silver was a notable loser.

U.S.Midwest Hot Rolled Coil Steel has spent 23 weeks being oversold.

And Lithium Hydroxide has now lingered in weekly oversold territory for 68 consecutive weeks.

Currencies saw the most amount of streaks being extended.

The DXY Index is at its highest close in 3 months and is in a 4 week rising streak.

The Aussie weakened, again, now for the 4th week against many and for 5 weeks specifically versus the USD.

The Yen and Canadian Dollar were weaker.

The Loonie is in a 5 week losing streak against the USD.

I found it interesting that the CAD has risen for 3 weeks vs the AUD.

The Euro rose and the EUR/GBP posted a bullish outside reversal.

The GBP/USD, the JPY/USD, MYR/USD, SGD/USD and NZD/USD have all fallen for 5 straight weeks.

Philippines Peso is in a 6 week losing streak vs USD.

And the GBP has climbed for 4 weeks versus the Aussie.

The larger advancers over the past week comprised of;

Cocoa 8.4%, Lean Hogs 5.5%, Lumber 5%, Brent Crude 3.8%, Oats 5%, DJ Transports 1.5% and the KRE Regional Bank Index rose 1.3%.

The group of largest decliners from the week included;

Aluminium (3.3%), Rotterdam Coal (2.5%), Bloomberg Commodity Index (2.2%), Baltic Dry Index (2.3%), WTI Crude Oil (3.2%), JKM LNG (2.3%), Arabica Coffee (2.2%), Brent Crude Oil (3.6%), Lithium Carbonate (2.7%), Lithium Hydroxide (4.9%), Newcastle Coal (2.3%), Natural Gas (14.5%), Nickel (1.6%), Palladium (7.8%), Platinum (3.3%), Gasoline (3.5%), Robusta Coffee (3%), S&P GSCI (2.1%), CRB Index (1.8%), Dutch TTF Gas (10.4%), Uranium (3.3%), Silver in AUD (3.1%), Silver in USD (3.8%), Rice (1.8%), CSI 300 (1.7%), AEX (1.7%), Bovespa (1.4%), TAIEX (2.4%), Nasdaq Composite (1.5%), KOSPI (1.6%), Mexico (2.4%), FTSE 250 (1.6%), Nasdaq 100 (1.6%), Oslo (1.9%), Helsinki (2%), PSI (2.3%), SMI (1.8%), SOX (4.1%), Chile (2.8%), S&P 500 (1.4%) and ASX Financial fell 1.6%.

November 3, 2024

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , , ,

Reading the Gold tape

October 29, 2024 Leave a comment

Last week, the share price of Gold Fields Limited (GFI:US) didn’t make a new ‘higher high’.

While several weeks earlier, it made a ‘lower low’.

To boot, its trading at various ‘overbought’ extremes and the there are gaps below waiting to be filled.

I’d say that the ‘fat part’ of the trade has been seen.

I’ll be interested buying it below $13.

October 29, 2024

rob@karriasset.com.au

Screenshot

Filed under Finance & Investment Tagged with ,

The bet is whether inflation rises

October 28, 2024 Leave a comment

The U.S. inflation rate is closer to its low, than its high,

and so my portfolios will be positioned towards assets which will benefit from higher inflation.

In the meantime, there may a little lower travel for the #inflation rate in the coming month or two.

October 28, 2024

by Rob Zdravevski

rob@karriasset.com.au

Screenshot

Filed under Finance & Investment Tagged with , ,

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