Unit 5 · Level 4 · Macro & Correlations
Macro: the tide under everything
Macro is the economy-wide weather: interest rates, inflation, employment, growth. It doesn't pick your stocks; it sets the TIDE every asset floats on. You met the core mechanism in League 1: rates are the price of money. Now we build the full dashboard.
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What you get asked
Match the macro release to what it measures
Four releases move global markets on a schedule. They're on every economic calendar, the same calendar your earnings lesson taught you to check.
Why does hot inflation (high CPI) usually hurt risk assets?
Money gets pricier, future cash flows discount harder, risk appetite shrinks. The chain: CPI hot → rate-hike odds up → discount rates up → long-duration assets (growth stocks, crypto) hit hardest. One chain explains years of headlines.
The market barely moves on a 'terrible' CPI print. Your League 1 training explains:
The fear was already priced; surprises move markets, levels don't. Consensus forecasts are the baseline. The tradable object is the GAP between print and forecast, same physics as earnings.
'Don't fight the ___' is the oldest macro rule: positioning against central-bank direction is expensive.
When the money-printer's owner is easing, shorts suffer; when it's tightening, heroic dip-buyers do. Central banks move slowly and telegraph loudly; listening is free edge.
For a swing trader, macro's practical job is…
Not day-guessing GDP. Tide check, then surf your setups. Fighting the tide with a beautiful pattern is how good trades drown. 🐜
The rest of this unit
Rates, inflation, risk-on/off and the tide under every asset you trade.