Forex, Indices, Fixed Income: What Markets are Global Macro and Why?

The term global macro gets thrown around frequently in financial circles — often as shorthand for “the big picture.” But for many investors, the phrase remains opaque. What exactly is a global macro market? More importantly, why should we care? 

Talking Points:

• A ‘global macro’ market is one that exerts influence well beyond national boundaries, often exhibiting a greater degree of influence, liquidity and general scale
• The Forex market is almost always a global macro market; but other frequented categories includes fixed income (particularly sovereign); equity indices and commodities
• Market conditions – most notably ‘risk appetite’ – can change the weight of global macro, leading to once unlikely leaders like Greek debt, crypto and now AI

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How to Define ‘Global Macro Markets’: Scale, Liquidity and Influence

At its most practical level, a global macro market is one that reflects, responds to, and helps shape the broad trends in the global economy and financial system. These are the arenas where interest rate policy, growth expectations, and risk sentiment converge - where the collective movements of governments, corporations, and investors shape prevailing priorities.

But not all large markets qualify. There are markets that seem to meet the level but never make the grade. Real estate, for instance, represents a vast store of global wealth – particularly in the US – but trades infrequently and locally. To function as a macro market, two traits are essential: scale and liquidity. The market must be deep enough to absorb institutional or even sovereign capital and liquid enough to translate global developments into price action almost instantly.

That’s why the foreign exchange market (FX), fixed income, equity indices, and commodities consistently emerge as a “core four” of global macro investing. Together, they reflect the ongoing negotiation between tenets of economic and financial health.

 

Forex is the Consummate Global Macro Market

If there is one market that consistently embodies ‘global macro’, it would be foreign exchange (also known as ‘FX’). Every FX trade inherently measures an economy’s strength against another, pricing not only currency values but also expectations for systemically relevant themes such as monetary policy, growth trajectories and geopolitical risk.

FX is inherently global and exceptionally liquid - trading over $9.6 trillion daily in OTC FX markets according to the Bank for International Settlement’s most recent Triennial report from April 2025 - and it reacts almost instantaneously to shifts in major fundamental themes. When we discuss EUR/USD, USD/JPY, or GBP/USD, it effectively prioritizes and evaluates core economic themes.

It should be said, however, that not all currencies and currency crosses are representative of macro interests collective judged by the global investment landscape. Smaller currencies – such as the Argentine Peso or Philippine Peso – may be notionally very large, but they are used significantly less than counterparts like the US Dollar, Japanese Yen or Euro; and can deviate from those same macro-oriented trends.

Foreign Exchange Turnover According to Triennial BIS Report
 
Source: Bank for International Settlements

 

Fixed Income, Indices and Commodities Frequent Macro Markets

Running a close second to FX is arguably fixed income - specifically, sovereign debt markets. The global bond market dwarfs equities in total value and forms the baseline upon which every other asset is priced as certain top-rated debt is used to set proverbial ‘risk free’ rates.

The U.S. 10-year Treasury yield, for instance, remains the world’s default safe haven benchmark – despite frequent rounds of dispute. Its movements influence not only domestic financing costs but also reserve flows, currency valuations, and capital allocation across borders. During periods of uncertainty, Treasuries become a haven; during tightening cycles, they become the arbiter of global liquidity conditions.

Key commodities like oil and gold occupy a unique intersection of the physical and financial worlds. Oil, as a critical input for growth and inflation, moves in rhythm with the global economy. Gold, by contrast, serves as a gauge of trust - rising when confidence in fiat systems or central banks wanes, and vice versa. The list of natural resources that occupy this designation is larger, but these are two of the most consistent players.

Meanwhile, equity indices such as the S&P 500, DAX, and Nikkei act as sentiment barometers. When risk appetite is high, global indices often reflect a core target of that enthusiasm and appetite for higher yield; when it fades, correlations tighten as capital unwind sinks the indices collectively. That synchronized behavior can render indices risk-trend indicators, earning them a place within the global macro framework.

S&P 500, US 10-Year Treasury Yield and WTI Crude Oil (Monthly)
 
Source: TradingView, Standard & Poor’s, CME

 

Risk Appetite Control Can Bestow Global Macro Influence 

A consideration of ‘global macro’ is what reflects a common denominator in market development for most of the time. There are a few fundamental winds that can claim a regular influence, but nothing as consistent in scope as ‘risk appetite’ (we discuss this concept specifically here). 
When optimism reigns, investors pour into growth assets such as equities and emerging-market currencies. When fear takes over, interests shift to driving capital to havens like the dollar, Treasuries, or gold. These transitions can define what markets benefit or suffer during active periods of volatility and trend development.

Risk Aversion Intensity Spectrum
 
Source: John Kicklighter

 

Thematic Trends: Greed Debt, Crypto Rise and AI

With the swing of sentiment to the extremes of ‘greed’ and ‘panic’, saturation of interests can often raise a leading interest outside of the core macro players. This seems to be increasingly the case over recent decades as financial engineering and loosened regulatory restrictions have boosted exposure to areas of the financial system that were previously inaccessible to the speculative crowd.  

For those that witnessed the aftermath of the Great Financial Crisis (GFC) or Great Recession of 2008, there was a notable upheaval in European sovereign debt. During that period in 2010, the most fraught and struggling of the Eurozone’s members financially – Greece – because the tail that wagged the dog on one of the largest financial systems in the world. Fear and circumstance elevated a national debt product that would normally flash on few global screens to the top of the headlines.  

Perhaps more recognizable to newer market participants is the influence that Bitcoin and the crypto market has had. Though a very new player on the financial scene, the background conditions of investor capital charged by post-pandemic stimulus and a risk appetite-amid-uncertainty drove the ‘promise’ of this transformative financial innovation. It’s adoption in the traditional financial world (so-called ‘TradFi’) has been slow with regulators also slow to warm, but risk appetite was so strong that those considerations were overlooked through periods.

The same kind of condition-determined representation of a less-than-macro market taking the banner of leadership may be the rise of Artificial Intelligence (AI). Nvidia and OpenAI have become household names and seem to have occupied the pinnacle of risk appetite in 2025 through the promise of groundbreaking efficiencies for the corporations and economies (read more on this trend here). Will it earn a permanent role in the global macro core? Time will tell. 

Chart of the Greek 10-Year Government Bond Yield and VIX Volatility Index (Monthly)
 
Source: Tradingview, Standard & Poor’s

 

-- Experts: John Kicklighter, Global Head of Content; Matt Weller, Global Head of Market Research

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