Macro indicators, assets and units: understanding what we look at
Nothing is decided before the data has been read. Inflation, growth, rates, assets: each figure tells part of the regime — none tells it alone. Knowing how to read comes before knowing how to choose.
A country reads in four blocks
A country reads through four blocks:
- inflation
- growth
- employment
- monetary conditions
Everything else follows from these four. The current regime first, asset behavior second.
Inflation: measuring the currency's loss of value
Main indicators
- inflation (headline)
- core inflation
- PPI (producer prices)
- wages
Reading
- headline: the overall level of prices
- core: the persistence
- PPI: upstream pressure
- wages: the domestic inflation loop
Example
- headline falling but core high: inflation persists under the surface
- PPI ticking back up: inflation ahead, possibly
Growth: measuring economic activity
Main indicators
- GDP
- industrial production
- retail sales
- PMI
Reading
- GDP: the overall picture, but lagged
- production: the industrial cycle
- retail: domestic demand
- PMI: the leading indicator
Key point
GDP is slow. PMIs and production, on the other hand, react fast. We read first what moves first.
Employment: domestic tension
Indicators
- unemployment
- wages
Reading
- low unemployment: a tight economy
- high wages: inflationary pressure
Monetary conditions: the price of money
Indicators
- policy rate
- short rates (3 months)
- long rates (10 years)
- real rate
- money supply (M2)
Reading
- nominal rates: the cost of financing
- real rates: the real constraint
- yield curve: the market's expectations
- M2: liquidity
Key point
The real rate comes first. It's what, more often than not, tips gold to one side and financial assets to the other.
Asset classes: each reacts to its own cause
No asset moves "on its own." Each responds to a specific driver.
Equities
- sensitive to growth
- penalized by high rates
Bonds
- sensitive to rates
- favored when rates fall and prices ease
Gold
- sensitive to the currency
- correlated with inflation and real rates
Cash
- stability
- optionality
Other assets
- commodities: sensitive to inflation
- bitcoin: a risk asset, tied to liquidity
Units: what we actually measure
1) Percentage (%)
Used for:
- inflation
- growth
- rates
Example:
- inflation 3%: loss of purchasing power
- growth 2%: economic expansion
2) Level (index, value)
Example:
- price index
- wages
3) Base 100
Lets you compare assets against each other.
Principle:
- every asset starts at 100
- you compare the trajectories
4) Currency
Assets can be expressed in:
- EUR
- USD
- gold
- bitcoin
The currency changes the reading
The same asset can rise in dollars and fall in euros. The currency isn't a presentation detail: it decides what you're reading.
5) Moving average (MA)
Lets you smooth the data.
Examples:
- 3 years
- 5 years
- 10 years
Reading
- cuts the noise
- shows the trend
What the dashboard actually shows
No chart is raw. Each one layers four things:
- raw data
- transformation (base 100)
- smoothing (MA)
- context (regime)
Common mistakes
Four traps come up every time. Naming them is halfway to avoiding them.
- looking at a single indicator
- ignoring the currency
- confusing level and change
- over-reading the short term
The full Cap Nord logic
The chain is short, and always in this order:
- read the indicators
- identify the regime
- observe the assets
- adjust the allocation
Key takeaways
- Macro indicators tell the current regime, not the future
- Inflation, growth, employment and rates are read together, never alone
- Each asset reacts to its own cause depending on the regime
- Units (%, base 100, currency) completely change the reading
Indicators drawn from public databases (IMF, World Bank, OECD, FRED, etc.), transformed and normalized. Frequency (monthly, quarterly) and source shown in the interface.