Global macro - Financial definition
Concise definition of the term global macro
Global macro is an investment strategy that bases portfolio decisions on the economic and political views of entire countries or regions, often involving multiple asset classes such as currencies, commodities, bonds, and equities.
Comprehensive definition of the term global macro
Global macro strategies involve a top-down approach to investing, where fund managers analyze and interpret broad macroeconomic indicators, geopolitical developments, and monetary policies across different countries and regions. These strategies leverage a wide array of financial instruments, including futures, options, and swaps, to exploit opportunities arising from anticipated economic trends and policy shifts.
For example, a global macro fund might take a long position in the US dollar while shorting the Euro if the manager predicts stronger economic growth and higher interest rates in the US compared to the Eurozone. This approach requires a deep understanding of global markets and can be highly flexible, allowing managers to quickly adapt to changing global conditions.