For example, if swap rates go higher, what exactly the market participants are doing or expecting? Is there a book which can teach us about these practical knowledge / experience? Thanks.
"Market situations" is a very broad topic and you will find an enormous amount of literature but I do not personally know of any single book that would cover most of those in a satisfying way. One common way to look at it is either by asset class (e.g. equities, credits, fx, fixed income, commodities, etc.) or instrument types (stocks, derivatives, bonds, repos, structured products, etc).
Depending on the level of depth you want to achieve, this may not even suffice as a healthy dose of micro and macro-economics are helpful to understand most "market situations". For example, an increase in swap rates may be due to an expectation that rates will rise due to inflation and again, the expectation of higher inflation may be due to various other factors.
I have limited experience, but you need a proper context to interpret what is happening in the market. To that end reading the newspapers and blogs might be better than a book. I of course assume that you understand the mechanics of the products that you are looking at. For example, how does interest rates change option prices.