In plain terms — The same macro shock can affect assets differently because it changes cash flows, discount rates, carry, physical demand and risk premia.
A conditional map of how growth, inflation, rates and liquidity reach earnings, curves, exchange rates and physical markets.
What it actually observes
A macro shock reaches each asset class through different economic rights. Equities depend on earnings and discount rates, bonds on curves and credit, currencies on differentials and flows, and commodities on physical demand, supply and inventories.
That is why “growth up” or “inflation down” has no single direction. The component that surprises, what was already priced and the horizon that dominates all matter.
Operational reading
Name the shock, freeze the prior price and distinguish surprise from the data level. Then trace a measurable chain toward cash flow, real rates, carry, the trade balance or inventories.
Use consistent windows and control for simultaneous news, positioning and liquidity. Equities and bonds moving together does not mean that they share the same causal channel.
Worked interpretation
Stronger growth may support earnings and commodities while raising real yields; currencies respond to relative differentials.
Advanced level
Return decompositions and regime models help separate growth, inflation and premia but rely on shock identification. Rolling correlations can change sign when inflation risk displaces growth risk.
Cross-asset portfolios require comparable exposures, duration and convexity. A historical relationship should be stressed across alternative episodes and paired with scenarios in which valuation or policy reacts differently.
Limits and common errors
No universal table converts a macro release into a position. Horizon, initial pricing, leverage and microstructure can dominate the signal; a cross-asset narrative remains valid only while its intermediate links are observable.
Sources
- BIS, Annual Economic Report, official documentation — analysis of interactions among the global economy, financial system and policy regimes.
- IMF, Global Financial Stability Report, official documentation — assessment of global markets, systemic vulnerabilities and emerging-market financing.
- ECB, Financial Stability Review, official documentation — twice-yearly evidence on euro-area financial vulnerabilities and systemic risks.