The term global macro is used to classify the strategy of certain hedge funds—those that take positions in financial derivatives and other securities, on the basis of movements in global financial markets. The strategies are typically based on forecasts and analysis about interest rates trends, movements in the general flow of funds, political changes, government policies, inter-government relations, and other broad systemic factors.A hedge fund strategy that bases its holdings–such as long and short positions in various equity, fixed income, currency, and futures markets–primarily on overall economic and political views of various countries (macroeconomic principles).
For example, if a manager believes that the U.S. is headed into recession, then he or she might short sell stocks and futures contracts on major U.S. indexes or the U.S. dollar. Or, a manager seeing big opportunity for growth in Singapore might take long positions in Singapore’s assets.