European Long Short macro and market update

26 November 2019

Quantitative analysis: Macro Matrix – tactical credit and economic indicators

EuroLongShortNovember2019

Source: Martin Currie. Six month data as at 20 November 2019.


  • Yields have risen and curves have steepened a little due to hopes that looser monetary policy will help growth and inflation.
  • However, raw material prices continue to grind downwards.
  • Signs that inventory levels may be stabilising thereby putting less pressure on economic growth.

Qualitative analysis: Market Traffic Lights – providing a strategic view

QualitativeAnalysisMarketTrafficLightsNovember2019

Source: Martin Currie. Six month data as at 20 November 2019.


  • European PMI data continues to deteriorate and corporate earnings are likely to continue to fall both this year and next. Historical data suggests we should be near a low.
  • Global PMI data continues to be weak and combined with the ongoing tariff wars there is a real threat to global growth. Any agreements over trade, Brexit and digital taxes will be a positive.
  • Further interest rate cuts will reduce income via falling savings incomes. We have seen the German and French consumer raising savings as a result.


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Some of the information provided in this document has been compiled using data from a representative account. The account has been chosen on the basis that it is the longest running Australian-domiciled account for the strategy. This account is an existing account managed by Martin Currie, within the strategy referred to in this document. This data has been provided as an illustration only, the figures should not be relied upon as an indication of future performance. The data provided for this account may be different to other accounts following the same strategy. The information should not be considered as comprehensive and additional information and disclosure should be sought ahead of any planned investment. The distribution of specific products is restricted in certain jurisdictions, investors should be aware of these restrictions before requesting further specific information.

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Investing in foreign markets introduces a risk where adverse movements in currency exchange rates could result in a decrease in the value of your investment.

Emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. Accordingly, investment in emerging markets is generally characterised by higher levels of risk than investment in fully developed markets.

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The strategy may invest in derivatives (Index futures and FX forwards) to obtain, increase or reduce exposure to underlying assets. The use of derivatives may restrict potential gains and may result in greater fluctuations of returns for the portfolio. Certain types of derivatives can be difficult to purchase or sell in certain market conditions.