Macro Extremes (week ending February 28, 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)

Swiss 10 year government bond yields *

JPY/AUD

JPY/CAD

HSCEI Index *

Hang Seng *

Tin

Overbought (RSI > 70) 

Japanese 2, 5 & 10 year government bond yields *

Brazilian 10 year government bond yield *

Urea (U.S. Gulf price) *

Gold in AUD, CAD and ZAR *

Hungary’s BUX Index *

Germany’s DAX Index

Czech Republic’s PX Index *

Switzerland’s SMI Index

And Chile’s IPSA and IGPA Indices *

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

Austria’s ATX *

Spain’s IBEX Index *

Extremes below the Mean (at least 2.5 standard deviations)

TBX

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

U.S. 5 year government bond yield minus U.S. inflation rate

U.S. 10 year government bond yield minus U.S. 10 year breakeven inflation rate

U.S. 5 year government bond yield minus U.S. 10 year inflation rate

Philadelphia SOX Index

Nikkei 225 Index

Oversold (RSI < 30)

U.S. 3 month government bill yield *

INR/USD

Australian Coking Coal *

Richards Bay Coal *

North European Hot Rolled Coil Steel *

Lithium Carbonate *

Lithium Hydroxide *

Newcastle Coal *

Uranium *

And Thailand’s SET Index *

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

Orange Juice *

Jakarta Composite Index

Notes & Ideas:

Government bond yields fell….

except for Belgian, Finland and Brazil’s bond yields.

U.S. 7’s & 10’s have fallen for 7 weeks.

As a result, the IEF bond ETF has risen for 7 weeks.

The U.S. 10 year and 5 year real interest rate entered extreme territory this week.

We saw a large fall and reversal in Swiss yields.

While the Japanese 10 year bond yield has climbed for 8 weeks.

Equities were notably weaker.

Italy’s MIB have risen for 5 consecutive weeks.

Vietnam’s main index has risen for 6 weeks.

Spain’s IBEX have extended its advance to 10 weeks straight.

Inversely, the S&P SmallCap 600, MidCap 400 and Russell 2000 have declined for the 5 consecutive weeks.

The Hang Seng and the HSCEI were registering overbought quinella prices early in the week, before they fell and broke their 6 consecutive weeks of advance.

Singapore’s Strait Times, South Africa’s SA40 and Helsinki’s 25 Index snapped their respective 4, 5 and 6 week winning streaks.

While Hungary’s BUX, Poland’s WIG broke their 9 week wining streaks.

The SENSEX and NIFTY are nearing extremes.

And Switzerland’s SMI has climbed for 9 of the past 10 weeks.

Commodity prices had a terrible week, across the board.

Tin, Corn, Wheat, Coffee, Sugar and Palladium were amongst the heaviest decliners. 

Shipping Rates, Lumber, Oasis were the few to rise for the week.

In fact, the Baltic Dry Index has soared 57% over the past 4 weeks, after registering an oversold reading.

Orange Juice tanks further, extends its losing streak to 10 weeks

U.S. Hot Rolled Coil Steel has climbed for 5 weeks.

Sugar broke its 5 week winning streak, erasing the past 3 weeks of gains.

Platinum has fallen for 4 straight weeks.

Silver in USD broke its 5 straight weeks of advance.

Gold in USD snapped its 8 week winning streak. 

Australian Coking Coal prices rose slightly, snapping its 7 straight weeks of losses.

Cattle is in a 5 week losing streak, while Uranium snapped its 4 weeks of decline.

Brent Crude and WTI Crude have fallen for 6 straight weeks. 

Lean Hogs broke their 4 consecutive weeks of advance,

Wheat slumped and broke its 6 week winning streak.

Tin prices have soared 12% over the past  weeks.

while Lithium Hydroxide has now lingered in weekly oversold territory for 91 consecutive weeks.

Currencies also saw much action.

The Yen and Swiss rose, confirming the ‘risk-off’ type of week.

The Aussie fell and did the Loonie.

In turn, we see the Yen in overbought territory this week against these ‘risk’ currencies.

The British Pound rose

And the U.S. Dollar rose against everyone.

The larger advancers over the past week comprised of;

Baltic Dry Index 25.3%, Lumber 2%, JKM LNG in Yen 2.9%, Urea, U.S. Gulf price 1.7%, Oats 1.5%, ATX 2.5% and IBEX rose 3.1%.

The group of largest decliners from the week included;

Aluminium (3.4%), Bloomberg Commodity Index (3.8%), Cotton (3.1%), Lean Hogs (4.6%), Heating Oil (2.7%), JKM LNG (2.3%), Arabica Coffee 4.2%, Lithium Hydroxide (1.9%), Tin (7.3%), Newcastle Coal (4.1%), Natural Gas (8.5%), Orange Juice (2.7%), Palladium (9.2%), Platinum (5%), Robusta Coffee (6.6%), Sugar (9.7%), Sugar #16 (4.5%), S&P GSCI (2.8%), CRB Index (3%), Dutch TTF Gas (6.5%), Brent Crude (1.6%), Gasoil (3.7%), Urea Middle East (4.2%), Silver in AUD (1.8%), Silver in USD (4%), Gold in USD (2.7%), Gold in GBP (2.2%), Gold in EUR (1.9%), Gold in CHF (2.1%), Corn (7.5%), Rice (1.6%), Soybeans (3%), Wheat (8%), Shanghai Composite (1.7%), AEX (1.7%), China A50 (1.6%), SOX (7.2%), HSECI (2.9%), Hang Seng (2.3%), BOVESPA (3.4%), Jakarta Composite (7.8%), Russell 2000 (1.5%0, TAIEX (2.9%), Nasdaq Composite (3.5%), KOSPI (4.6%), Mexico (2.6%), Nasdaq Biotech (1.6%), Nasdaq 100 (3.4%), Nikkei 225 (4.2%), NIFTY (2.9%), SA40 (3.5%), SENSEX (2.8%), SET (3.4%), TA35 (1.8%), FTSE 100 (1.7%), ASX 200 (1.5%), ASX Materials (5.3%) and the ASX SmallCaps fell 2.5%.

March 2, 2025

By Rob Zdravevski

rob@karriasset.com.au

Macro Extremes (week ending January 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.

* denotes multiple week inclusion

Extremes above the Mean (at least 2.5 standard deviations)

Australian 10 year bond yield minus Australian 5 year bond yield *

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

U.S. 10 year bond yield divided by the Australian 10 year bond yield spread *

Austrian 10 year government bond yield

Japan Korean Marker (JPM) LNG *

Natural Gas *

CAD/AUD

GBP/AUD *

Overbought (RSI > 70)

Japanese 2 year government bond yield *

Brazil 10 year government bond yield *

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

DXY Index

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)

None

Extremes below the Mean (at least 2.5 standard deviations)

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

Rice

AUD/IDR

AUD/GBP *

AUD/CAD

EUR/USD

NZD/USD

RMB

ZAR/USD *

Egypt 30 Index

Oversold (RSI < 30)

U.S. 3 month government bill yield *

North European Hot Rolled Coil Steel *

U.S. Midwest Hot Rolled Coil Steel *

Lithium Carbonate *

Lithium Hydroxide *

Newcastle Coal *

BRL/USD *

CAD/USD *

DKK/USD

KRW/USD *

SGD/USD

Brazil’s BOVESPA Index

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

Chinese 10 year government bond yields *

INR/USD *

Notes & Ideas:

Government bond yields were mixed again.

The Euro 10 year yield has risen for 5 weeks straight.

Belgian, Finnish, Spanish, French Italian, Portuguese and Belgian yields have fallen for 4 consecutive weeks

All British yields and Brazilian 10’s broke their respective 4 and 6 week rising streaks.

And Chinese 10’s resumed their decline falling to a new low of 1.6%.

Equities mostly rose.

Strength tended to favour the small/mid caps over the large caps.

The Czech Republic’s PX Index has risen for 12 of the past 13 weeks.

Israel’s Tel Aviv 35 Index had climbed for 6 straight weeks.

Brazil’s BOVESPA has fallen for 4 straight weeks and enters the oversold region.

The Regional Banks (KRE) Index is in 6 week losing streaks.

While Chinese and Hong Kong equities were notable decliners.

Commodity prices were mixed.

Oil, Gases, Coking Coal, Shipping Rates, Cocoa, Uranium were the notable gainers.

Aluminium, Steel, Wheat, Lumber, Rubber and Nickel prices were amongst the weeks losers.

Arabica coffee isn’t overbought this week.

Australian Coking Coal not oversold, nor is Uranium.

Gold as priced in AUD and CAD has risen for 5 consecutive weeks.

Corn broke its 4 week rising streak.

Nickel is now trading 32% below its 200 week moving average and at its lowest close since early June, 2020.

Sugar has fallen for 11 of the past 13 weeks.

Dutch TTF Gas has climbed 19% over the past 3 weeks.

Palladium and Uranium broke their respective 5 and 6 weeks of declines. 

U.S.Midwest Hot Rolled Coil Steel has spent 32 weeks being oversold,

while Lithium Hydroxide has now lingered in weekly oversold territory for 83 consecutive weeks.

Currencies were active, again.

The big news was the DXY (USD) Index entering overbought territory,

And the resulting extremes appearing in this weeks list.

The Aussie, Loonie and Yen were firmer.

Swiss was weak as was the Euro and Pound Sterling.

The Chilean Peso is in a 5 week losing streak versus the USD.

And the AUD bounced from being oversold against the Thai Baht.

EUR/JPY and JPY/USD broke their 4 straight weeks of gains.

The Loonie remains oversold versus the USD as does China’s Renminbi.

And the NZD/USD has fallen for 12 of the past 14 weeks as it registers its lowest close since May 2009.

The larger advancers over the past week comprised of;

Australian Coking Coal 4.6%, Baltic Dry Index 7.5%, Brent Crude 4.1%, Cocoa 11%, WTI Crude 4.7%, Heating Oil 4.4%, Cattle 1.8%, JKM LNG in Yen 2.5%, Lithium Hydroxide 2.5%, Gasoline 4.2%, Sugar 1.5%, S&P GSCI 1.9%, CRB Index 1.8%, Dutch TTF Gas 3.4%, Gasoil 3.3%, Uranium 6.5%, Gold in EUR 1.9%, Gold in GBP 2%, Pakistan 5.6%, Oslo 2.6%, Poland’s WIG 2% and Jakarta Composite rose 1.8%.

The group of largest decliners from the week included;

Aluminium (3.3%), Cotton (1.8%), North European Hot Rolled Coil Steel (3.1%), Lean Hogs (4%), Copper/Gold Ratio (2%), U.S. Midwest Hot Rolled Coil Steel (3%), Lumber (3.7%), Lithium Carbonate (6%), Newcastle Coal (1.8%), Nickel (1.5%), Rubber (2.7%), Wheat (3.2%), Shanghai Composite (5.6%), CSI 300 (5.2%), China A50 (3.9%), HSCEI (2%), Hang Seng (1.6%) and Taiwan’s TAEIX fell 1.6%.

January 5, 2025

By Rob Zdravevski

rob@karriasset.com.au

Macro Extremes (week ending October 25, 2024)

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)

Palladium

Silver in AUD & USD

Tel Aviv 35

And Australia’s ASX Small Caps *

Overbought (RSI > 70)

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

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

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

Gold as priced in CHF *

Pakistan’s KSE *

Extremes below the Mean (at least 2.5 standard deviations)

Baltic Dry 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)

None

Notes & Ideas:

Global government bond yields rose.

The Brazilian, Finnish and Korean yields bucked that trend.

Australian yields have risen for 4 consecutive weeks.

The U.S. 10 year vs Euro 10 year spread yield has climbed for 6 straight weeks,

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

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

Lastly, the U.S. 20 year bond yield has risen for 5 of the past 6 weeks.

Equities were weaker.

North American and Asian indices were the most weakest.

The U.S. Transports indices dropped out overbought territory as did the Dow Jones Industrials, Thailand’s SET and Toronto’s TSX.

The Hang Seng and HSCEI are in 3 week losing streaks.

The Nikkei 225 has declined 4.2% over the past fortnight.

India’s Nifty and Sensex have fallen for 4 consecutive weeks which isn’t surprising after spending a couple months trading at various extremes. 

The ASX Materials index has also declined for the past 4 weeks. 

The Tel Aviv 25 Index is at an all-time high……

And the Dow Jones Industrials, Nasdaq Composite, S&P MidCap 400 and the S&P 500 all broke their 6 week winning streaks.

Commodity prices were stronger.

Energy prices bounced back and Palladium, Gold, Orange Juice, Corn & Soybeans were the other prominent gainers.

Cocoa, Coffee, Uranium, Nickel and Shipping Rates were the notable decliners for the week.

The former has declined 13% over the past fortnight.

Copper, the Baltic Dry Index and Robusta Coffee have fallen for 4 straight weeks. 

The latter has slumped 20% over that time, while the Baltic Dry Index is at oversold extreme.

Furthermore, the Baltic Dry Index has fallen 38% over the past 3 weeks.

China Coking Coal completed a reversion to the mean.

The Copper/Gold Ratio has fallen for 4 consecutive weeks.

Palladium is at its highest closing price since mid-December 2023.

Lean Hogs are in a 6 week winning streak.

Natural Gas soared 13.4% making up half of the 24% decline seen in the previous 3 weeks.

U.S.Midwest Hot Rolled Coil Steel has spent 22 weeks being oversold.

And Lithium Hydroxide has now lingered in weekly oversold territory for 67 consecutive weeks.

Currencies action was dominated by U.S. strength, again; again.

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

The Aussie weakened, again, again.

The Yen was weaker.

The Aussie has fallen for 4 weeks against the Rupiah and the USD.

Similarly, the Brazilian Real, Canadian Dollar and Yen have also declined for the past 4 weeks versus the USD.

Philippines Peso’s falling streak vs USD has extended to  weeks as has the EUR/USD.

While the Swiss Franc rose for the week.

The larger advancers over the past week comprised of;

Aluminium 2.4%, Bloomberg Commodity Index 2%, WTI Crude Oil 4.5%, Lean Hogs 2.4%, Heating Oil 4%, JKM LNG 3.9%, JKM in Yen 3.9%, Natural Gas 13.4%, Orange Juice 6%, Palladium 10.9%, Gasoline 3.6%, S&P GSCI 2.7%, CRB Index 1.8%, Dutch TTF Gas 11%, Brent Crude 3.8%, Gasoil 4.3%, Silver in AUD 1.6%, Gold in AUD 2.5%, Gold in EUR 1.6%, Gold in GBP 1.7%, Corn 2.6%, Soybean 1.5%, KSE 5.6% and Oslo rose 1.9%.

The group of largest decliners from the week included;

Baltic Dry Index (10.5%), Cocoa (9.1%), Arabica Coffee (3.5%), Lithium Hydroxide (4.4%), Nickel (4.4%), Robusta Coffee (5.8%), Uranium (2.5%), Developed World ex USA (2.1%), KBW Baks (1.5%), CAC (1.5%), DJ Industrials (2.7%), DJ Transports (1.7%), S&P SmallCap 600 (3.1%), Russell 2000 (3%), KLSE (1.7%), KRE Regional Banks (2.9%), FTSE 250 (1.6%), S&P MidCap 400 (2.8%),  Mexico (2.3%), Nasdaq Biotech (2.6%), Nikkei 225 (2.7%), Helsinki (1.5%), Sensex (2.2%), SET (1.8%), S&P 500 (1%), TSX (1.5%), Vietnam (2.6%), WIG (2.3%) and the ASX Industrials fell 2.2%. 

October 27, 2024

by Rob Zdravevski

rob@karriasset.com.au

Macro Extremes (week ending October 18, 2024)

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)

Brazilian 10 year government bond yield *

GBP/EUR

Dow Jones Transports

Nasdaq Transports *

And Australia’s ASX Small Caps *

Overbought (RSI > 70)

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

Dow Jones Industrials *

Thailand’s SET 

And Toronto’s TSX *

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

Gold as priced in CHF & EUR

Pakistan’s KSE *

Extremes below the Mean (at least 2.5 standard deviations)

None

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 mostly fell,

This seems logical as the EU announced interest rate cuts, this past week.

This also meant that yield across the British curve broke their 4 week rising streak.

Japanese and Australian yields bucked the falling trend. 

U.S. 20 and 30 year yields also broke their 4 winning streak.

The US minus German 10 year spread has risen for 5 consecutive weeks.

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

Equities were mixed, with a bias towards higher prices.

The SOX and AEX has bearish outside weeks.

The U.S. Transports indices are notable entrants this week.

Chinese equites continued their weakness following recent visits to the overbought extreme category.

The KBW Banking Index is near to posting an overbought quinella extreme. 

While Italy’s MIB is trading at stretched levels, it remains miles below it all-time high.

The ASX Financial have risen 6% in the past fortnight, recovering the 6% decline in the prior fortnight.

Toronto’s TSX and the Nasdaq 100 have risen 8.7% and 10% respectively over the past 6 weeks.

The Dow Jones Industrials, Nasdaq Composite, S&P MidCap 400 and the S&P 500 have all put together 6 week winning streaks.

And the Tel Aviv 25 Index is at an all-time high…….

Commodities were broadly weaker, again.

The main drag were prices across the energy complex.

Base Metals and Grains were also weaker.

Inversely, Precious Metals had a good week and various prices appear in overbought territory.

Incidentally, many commodity prices are also establishing 3 week streaks on either side of the ledger.

The Baltic Dry Index has fallen 27% over the past 3 weeks.

Lean Hogs are in a 6 week winning streak.

Cattle broke its 5 week winning streak.

Coffee prices saw an anomaly. Arabica rose while Robusta fell.

Natural Gas has sunk 24% in the past 3 weeks.

U.S.Midwest Hot Rolled Coil Steel has spent 21 weeks being oversold.

And Lithium Hydroxide has now spent 66 consecutive weeks in weekly oversold territory.

Currencies action was dominated by U.S. strength, again; again.

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

The Aussie weakened, again.

The BRL/USD is nearing an oversold quinella. 

The loonie mainly rose.

The Euro was slightly weaker.

And the British Pound was slight stringer

And the Philippine Peso has fallen for 4 consecutive weeks versus the USD.

The larger advancers over the past week comprised of;

Coffee 2.1%, Platinum 3%, Silver in AUD 7.6%, Silver in USD 6.9%, Gold in AUD 3.1%, Gold in CAD 2.7%, Gold in CHF 3.3%, Gold in EUR 3.1%, Gold in GBP 2.6%, Gold in USD 2.4%, Gold in ZAR 3.6%, KBW Bank Index 2.8%, DAX 1.5%, MIB 2.6%, IBEX 1.8%, IDX 2.9%, S&P Small Cap 600 1.7%, Russell 2000 2%, TAIEX 2.6%, KRE Regional Banks 2.8%, FTSE 250 1.9%, PX 2.1%, STI 1.9%, TA25 2.1%, Nasdaq Transports 2% and the ASX Financial rose 4.1%. 

The group of largest decliners from the week included;

Australian Coking Coal (4%), Bloomberg Commodity Index (2.6%), Baltic Dry Index (12.9%), Cocoa (3.7%), WTI Crude Oil (8.4%), Copper (2.4%), Heating Oil (8.2%), JKM LNG (3.2%), Lithium Carbonate (1.9%), Tin (3.7%), Newcastle Coal (2.3%), Natural Gas (14.1%), Nickel (4.2%), Gasoline (7.2%), Robusta Coffee (2.6%), S&P GSCI (4.9%), CRB Index (3.9%), Dutch TTF Gas (1.7%), Brent Crude Oil (7.2%), Gasoil (8.6%), Corn (2.7%), Soybeans (3.2%), Wheat (4.4%), China A50 (2%), Egypt (2%), HSCEI (2%), Hang Seng (2.1%), Nikkei 225 (1.6%) and the Philadelphia Semiconductor (SOX) Index fell 2.4%.

October 20, 2024

by Rob Zdravevski

rob@karriasset.com.au

Macro Extremes (week ending June 28, 2024)

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

AUD/JPY

Overbought (RSI > 70)

Brazilian 10 year government bond yield *

Biodiesel *

GBP/JPY *

Amsterdam’s AEX *

Budapest

Karachi’s KSE *

Nasdaq Composite * 

Nasdaq 100 *

S&P 500 *

and Taiwan’s TAEIX *

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

USD/BRL *

NIFTY *

SENSEX *

Extremes below the Mean (at least 2.5 standard deviations)

Australian 10 year minus Australian 2 year government bond yield spread *

Australian 10 year minus Australian 5 year government bond yield spread *

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

U.S. 10 year divided by the Australian 10 year government bond yield 

Lean Hogs

COP/USD

EUR/AUD

And Russia’s MOEX

Oversold (RSI < 30)

Chinese 10 year government bond yield 

North European Hot Rolled Coil Steel *

U.S. Midwest Hot Rolled Coil Steel *

Lumber *

Lithium Hydroxide *

Shanghai Rebar

JPY/USD

JPY/AUD

RMB

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

BRL/USD

Corn

Notes & Ideas:

Government bond yields rose, again, 

Except for the Swiss, Swedish, Finnish and Danish 10’s.

The yield in the Swiss 10’s have fallen for 4 consecutive weeks.

Other than the Chinese and Brazilian 10’s lodging into opposite end of extreme categories, we have interesting bond spreads appearing this week.

And we the U.S. 10-2 yield curve is nearing an oversold extreme.

U.S. 5 & 10 year breakeven inflation rates bounced off their oversold lows.

And Chilean 2 year yields broke their 8 consecutive weeks of declines, In last week’s note, I commented that their oversold reading may lead the world in a trough in yields.

Equities saw strength, again.

As they bounced, so did many of last week’s oversold entrants.

Other extended their losing streaks to 6 consecutive weeks, among them China’s CSI 300 and Shanghai Composite along with Thailand’s SET.

Chile has fallen for 5 straight weeks.

While China’s A50, Chile’s IPSA and Torontos’ TSX broke their 5 week losing streaks.

Philadelphia Semiconductor Index (SOX) fell 1.2% and is not overbought anymore.

The CAC-40 had a bearish outside reversal week.

While the KOSPI has risen for 4 straight weeks and Indonesia’s main index has climbed 6% over the past fortnight.

Commodities were mixed, again, with a bias towards weakness. Again.

Once again, the weakness won’t show up in the commodities indices due to the positive skew weighting afforded to the Crude Oil weightings.

Although the Bloomberg Commodity Index has decline for 5 of the past 6 weeks.

Palladium, Sugar and Oats were amongst the few winners.

Coking Coal, Cocoa, Natural Gas and Corn were amongst the notable losers, again.

Lean Hogs have slumped for 9 of the past 10 weeks, falling 14% over that time.

Natural Gas prices have posted a 15% loss during its 3 week losing streak.

Nickel snaps its 5 week losing streak during which its price retracing 16%.

Cocoa has given back 16% of its recent 37% advance seen over the previous 6 weeks.

The Copper/Gold Ratio has declined for 6 consecutive weeks.

Soybeans and Wheat prices have fallen for 5 straight weeks.

Iron Ore snapped its 4 weeks of declines.

Lumber has fallen for 11 weeks of the past 14 weeks.

And Lithium Hydroxide has now spent 50 consecutive weeks in weekly oversold territory.

Currencies continue to provide action, again and again.

Many currencies no longer appearing in extreme categories.

The Aussie rose. 

The Loonie was quiet and mixed.

The USD (DXY) has risen for 4 straight weeks.

The Euro was mainly firmer.

The USD/CLP broke its 5 week rising run.

And the Yen’s weakness dominated news.

The larger advancers over the past week comprised of;

Palladium 5.8%, Raw Sugar 6.5%, Refined Sugar 2.6%, Oats 3.4%, KBW Banks 2.5%, Budapest 2.4%, DJ Transport 2%, Egypt 5.1%, BOVESPA 2.1%, Indonesia 2.5%, Russell 2000 1.3%, KRE Regional Banks 4.5%, Nikkei 2.6%, Nifty 2.2%, PSE 4.1%, Sensex 2.4% and Toronto’s TSX rose 1.5%

The group of largest decliners from the week included;

Australian Coking Coal (4.5%), Cocoa (13.2%), China Coking Coal (6.3%), Lean Hogs (2.7%), Lithium Hydroxide (3.9%), Tin (2.8%), Natural Gas (7.5%0, Orange Juice (2.7%), Robusta Coffee (2.1%), Silver in AUD (1.8%), Corn (7.5%), CAC (2%), HSCEI (1.7%), Vietnam (2.9%) and the Hang Seng fell 1.7%.

June 30, 2024

by Rob Zdravevski

rob@karriasset.com.au