Fund Performance per day (inception date: 20 Oct 06) : - 0.0984%

Today

USD - Bernanke's remarks in the early morning surprised most traders with hawkish comments on the US economy, saying that the economy is on track on her expansion through 2007, weathering the slowdown laargely confined to the housing sector. Yet, the dollar was still perceived as overvalued against most crosses and we have not seen much dramatic trades in any particular direction against the dollar. Just a while ago, better than expected GDP figures failed to push the greenback any higher, which was probably offset by the lower housing sales numbers.

JPY - The Yen gained on stronger than expected Industrial output, which caught the market offguard. The step up was mainly due to higher output from the makers of semiconductor- and flat panel-processing equipment as well as car manufacturers The 1.2% rise beat the market's consensus forecast for a month-on-month fall of 0.4 pct. The ministry of Trade and Industry predicts that output will jump by 2.7 pct in November from October and increase by a further 0.1 pct in December from November. Nonetheless, despite a rebound in production and shipments, the inventory index rose 0.8 pct from the previous month to 95.7 in October, an all-time high, with the inventory index for the electronic devices sector edging up 0.1 pct to a record 162.9.

GBP - (From AFX) UK mortgage lending and approvals jumped to their highest levels in three years during October, suggesting that the housing market continues to grow apace despite higher interest rates, figures from the Bank of England showed. Further evidence of housing market strength will be a worry for UK rate-setters and raises the chances of interest rates rising further early next year. Earlier this month, the Bank of England raised interest rates to 5.00 pct, their highest level in over five years, to follow up the quarter point rise in August, but as yet there has been little evidence to show that the housing market has started to cool as a result. House Prices can be expected to rise given the highest mortgage approval levels

Later (Lots of data coming up)
0300h - USD : Fed's Beige Book (More hawkish comments expected)

0700h - EUR : French Unemplyment Rate (Might be worse than expected)

0730h - AUD : Retail Sales / Other numbers (might push the AUD to new highs)

1300h - JPY : Housing Starts / construction orders 1445h - CHF : CPI

1500h - GBP : Nationwide House Prices

1545h - EUR : French Consumer Confidence / Producer Prices

1655h - EUR : German Unemplyment Change

1800h - EUR : Eurozone GDP / Eurozone Consumer Confidence

2130h - CAD : GDP

2130h - USD : Personal Income / Initial Jobless Claims

2230h - USD : Housing Price Index

Fund Performance per day (inception date, 20 Oct 06) :-1.70154%

Yesterday

USD - Fed Data is indicates that the construction industry is nearing the bottom and is set to stabilise, without unduly undermining consumer confidence. This would allow economic growth to return towards trend next year. On FX, Dollar gained is slowly gaining strength on optimism because of good Thanksgiving sales in the US. This could signal the near term correction that everyone is looking for in the EUR/USD pair

EUR - Europe is overtaking the United States and Japan in the race to reap benefits from the explosion in world trade and investment. The Continent is claiming a bigger share than the United States of the increased trade with fast-emerging markets like Brazil, Russia, India and China, according to economists at Goldman Sachs Group. Companies like the French retailer Carrefour and the German software maker SAP are winning customers in emerging markets at the expense of rivals based in other regions…Investors have already taken note, with global fund managers naming the 12-nation euro zone as their preferred stock market worldwide for six straight months and forecasting more gains next year, according to findings in a Merrill Lynch survey published this month. The European companies are better able to exploit opportunities in emerging markets, partly because they have cut jobs at home or moved factories to cheaper labor markets overseas…"

Today

JPY - Japan released its retail figures this morning, indicating a 0.1% increase. Markets were expecting a 1.2% decrease. However on FX, the markets did not react to the 0.1% increase. The USD and EUR crosses did not show much movement to the news. BoJ Fukui yesterday again offered little insight on whether the central bank would tighten policy in December. He only repeated previous remarks that the Japanese central bank will gradually adjust interest rates, but he avoided ruling out the possibility of a rate increase by year end. He suggested that developments in domestic private consumption, capital spending, and the U.S. economy are key factors in setting monetary policy.

USD - Durables Goods figures came in a while ago, showing the largest decline since January. This caused the dollar shorts to take a quick profit before the Housing figures set for release later in 20 minutes time. Earlier, Paulson had asked a more flexible Yuan and that a strong dollar was in US interest.

OECD - The Organisation for Economic Co-operation and Development yesterday criticised the Russian government for its expansion into key economic sectors and raised concern about the "seemingly insatiable appetite" of Gazprom, its state-run energy giant. OECD said that Gazprom has been expanding its interests in recent years in other sectors such as oil, electricity, power generation machinery and media and her investments in developing gas fields has been minimal over the past few years, leading to stagnating production. The OECD's criticism comes at a time of growing concern about Russia's ability to sustain and increase its gas production. On Japan, OECD said that the BoJ should not raise interest rates until economic indicators show that the country is out of deflation. On China, it raises its GDP growth to 10.7 % in 2006 and 10.3% in 2007. OECD's Cotis also said that the yuan is indervalued, and that oil is not likely to dip any further and that metal prices will decline. Cotis also said that the Euro rise was not alarming as it reflected the strength of the Euro economies. On the US, OECD said that growth will slow down but will pick up slightly in late 2007.

Later

2300h - USD : Existing Home Sales / Consumer Confidence / Richmond Fed Manufacturing Outlook

0100h - USD : Bernanke speaks on the US economy in NY

0530h - USD : Fed's Moskow speaks in Chicago

0750h - JPY : Industrial Production Figures

0830h - AUD : Trade Balance

1730h - GBP : M4 Money Supply / Consumer Credit

Fund Performance per day (inception date, 20 Oct 06) : -1.83510%

Friday -

EUR - The break of the 1.2980 dollar cross sent the EUR to a 19 month high of 1.3194. The surge in the Euro came from comments from Deputy Governor Wu of PBoC, which mentioned that the Esat Asian Foreign reserves are at risk from the depreciation of the greenback. This had prompted investors to look to keeping alternative currencies such as the Euro. Lots of Bullish sentiment on the Euro, with some banks targeting highs of past 1.33 to 1.34. On the fundamentals, Euro confidence data from the Euro Zone shows that French growth is lagging behind other Euro zone countries.

GBP - GDP figures came in according to expectations. Some economists expect BoE to keep rates at 5% unless there is a rise in wages in the the future, which will compel the central bank to raise interest rates to 5.25%. The GBP also benefited from the dollar selling on friday, pushing it to an all time high.

NZD - The trade balance in New Zealand came out at disappointing -1.167B which was twice as large as expected. Look for a more downside to come with Finance Minster Mullen of New Zealand to set the pace on Tuesday afternoon at 1500h (Singapore time). The last few speeches he has talked the kiwi significantly lower suggesting that he would like to see NZDUSD trading in the 0.4000 area

Today

JPY - Abe seeks to reduce the number of JGBs YoY, the Japanese government expects tax revenues to increase with the next year and it plans to go ahead with fiscal reconstruction by reducing the number of JGB issuances. Output of Japanes cars increased YoY by as much as 15%.

USD - No US releases today but the market will be looking to the slew of US releases starting tomorrow. FX trading started the week with further weakness in the USD, causing the Euro and Cable to surge even higher. No reasons for the surge but some are saying that stop losses had been triggered, prompting the EUR/USD to reach 1.3180 levels.

Later

1600h - JPY : Fukui speaks at Osaka

1630h - GBP : Mortgage lending figures

1900h - NZD : Business confidence

0650h - JPY : Retail Figures.

Fund Performance per day (inception date, 20 Oct 06) : -1.908%

Yesterday

Oil - Oil prices fell after the US inventory figures showed a much greater than expected rise in crude oil stocks last week as imports surged despite OPEC output cuts and weather-based supply disruptions in Louisiana and Alaska.

CAD - CPI figures came in line with expectations. The loonie might be weakened by the dip in commodity prices.

AUD - The Aussie was well supported by strong M&A and IPO activity and many Japanese incestors were long AUD/JPY, given recent >AUD1bln worth of Uridashi issued.

USD - It was holiday season but larger than expected inital jobless claims sent the USD diving, the greenback is seeing signs of weakness, especially against the Yen.

Today

Japanese and US makrets were on holidays today, there were hardly any activity in the morning

EUR - The markets focused on the German IFO figures today, which came in at 106.8. The market was expecting a dip to 105.2 and As a result, the EUR gained in most of the crosses, the EUR/USD pair went close to 1.2980 level.

GBP - (From AFX) Third quarter business investment in the UK rose 3.1 pct from the previous quarter to reach a record high, official data showed. The Office for National Statistics said business investment rise by 31.013 bln stg in the latest quarter, up from 30.089 bln in the second quarter. Compared with he same period a year ago, business investment was up 6.9 pct. EUR and GBP looking extremely bullish.

Later

2330h : CAD - BoC Review

0503h : CAD - Economic update

1630h : GBP - Slew of important indicators coming out, including GDP and import/export figures.

Fund Performance per day (inception date, 20 Oct 06) : -2.0248%

Today

USD - The Greenback was under pressure, weighed down after the White House cut growth forecast this year to 3.1% from 3.6%, and for 2007 from 3.3% to 2.9%. White House representative Edward Lazear said that the cut in growth forecast is primarily a reflection of housing market. White House also cut its inflation forecast to 2.3% from 3.0% for 2006, though for 2007, it seens CPI higher at 2.6% from earlier forecast of 2.4%. The rise in Oil prices was also seen as a dollar negative.

JPY - Lots of attention this morning and through the afternoon. Rumors was that the MoF is asking the Japanese exporters to buy JPY. Lots of USD Selling from US Investment houses caused the USD/JPY cross to drop. Further drops seen on comments from Euro's Juncker that the "fall of the Yen was too rough". The Japanese Government downgraded its economic assessment of the economy slightly, stating that the private consumption had been low but she was still confident that the corporate profits will spill over to the housing sector and drive the economy. Bullish sentiment rising on the JPY...

EUR - The euro was well supported on news that consumer spending in France got off to a good start in the fourth quarter. The figures served to offset the effects of weak GDP growth in the third quarter in data out yesterday. It can be seen that the Euro will end the year strongly with German VAT-induced consumption. Monetary policy now points to an additional rate hike in the first quarter of 2007 and will continue to provide support for the euro

GBP - The pound weakened slightly after minutess showed that a split vote in favour of a rate hike earlier this month. 'Following a dovish inflation report, the minutes voting composition will further scale back expectations for higher rates ahead. Hereafter, the trajectory of the repo rate will hinge on the outcome of pay settlements from January onwards,' said Zaki Kada at Thomson Ifr Markets.

CAD / NZD/ AUD - Increase in commodity prices gave support to the Australian and Kiwi dollars. The Canadian dollar too was well bid, as the buoyancy of the commodity market helped offset the impact of weak Canadian retail sales data.

Later

1900h - CAD : CPI

2030h - USD : Initial Jobless Claims

1400h - EUR : German GDP

Fund Performance per day (inception date, 20 Oct 06) : -2.1648%

Today

LFO Indicators : Ifo world economic indicator points to moderate cooling in next 6 mths. The climate indicator for western Europe declined to 99.8 from 104.9 but was still clearly above its long-term average. The North America climate indicator eased to 96.2 from 98.0, dropping below its long-term average for the first time in three years. And the climate indicator for Asia rose to 109.3 from 102.8. Survey respondents considered that the euro and pound have been somewhat overvalued this year, with the yen undervalued and the dollar properly valued.

CHF - Switzerland recorded a trade surplus of 1.58 bln sfr in October, down from September's record high of 1.8 bln. And Swiss watch exports rose 15.5 pct year-on-year to 1.504 bln sfr in October, reaching its highest ever monthly level, the Federation of the Swiss watch industry (FH) said. (Probably due to the upcoming Christmas season around the world.) Producer and Price Index fell 0.1%, in line with market expectations.

USD - Seen as neutral as the US market is having an early Thanksgiving.

EUR - Signs of slowing growth is showing in Europe. Italian Industrial Orders came out at -5.2% MoM. The stagnation of the French economy in the third quarter was the result of an unexpected decline in exports and a fully anticipated running down of inventories, economists said. 'A surprise drop in exports...was partly responsible for the disappointing data,' said Stuart Bennett of Calyon. The drop in exports was partyly due to a strong Euro.

OIL - Crude went up to 59 on Alaskan oil supplies interupted

Later

2030h - CAD : Retail Sales / Leading Indicators (USD/CAD looking overvalued, look for a surprise in retail figures)

0650h - JPY : Industry Activity Index/ Trade Balance

1200h - JPY : Supermarket Sales

Fund Performance per day (inception date, 20 Oct 06) : -2.353%

Yesterday

CAD - Bearish in the long term, because of falling oil prices. However, Investment houses have indicated a possibility of a near-term bounce. Indicators have pointed that the CAD may be overvalued. This week, watch for important CAD data.

SEK - Medium Term Extreme Bullish Sentiment

AUD - Weaker Commodities pusher the AUD down but AUD is expected to stay in range.

USD - Yesterday, the indicator of future economic activity inched higher in October, which indicate that recent weakness in the housing market hasn't been severe enough to offset lower gas prices and a rising stock market. The increase came in short of the market's consensus forecast for a rise of 0.3 percent. The US economy is growing, but at a slow pace. USD might be neutral in the mean time, while a rate cut is possible in early 2007

Over the weekend

G20 - The G20 meeting in Australia did not have any significant impact on FX. Aussie Treasurer Peter Costello says G20 has agreed on the need for increased Forex flexibility, and it is a question of timing. (I am quite sure the comment was meant for the Asian currencies) Japanese Finmin Koji Omi says it is appropriate for FX moves to reflect economic fundamentals.

Later

1200h - JPY : BoJ releases minutes

1415h - CHF : Swiss Trade Balance

1445h - EUR : French GDP

1515h - CHF : Producer and Import Prices

1800h - GBP : UK Industrial Trends Survey

2030h - CAD : Retail Sales / Leading Indictators

Fund Performance per day (inception date, 20 Oct 06) : -2.2813%

Yesterday

USD - The dollar rose slightly aginst most major currencies. The Fed remains focused on inflation, the minutes of their last meeting suggested that a near-term cut in interest rates remains unlikely. FX markets have begun to see a greater probability of a rate cut by May, in part because of softer-than-expected data on wholesale prices, manufacturing activity and retail sales...Thus, the Fed could stay on hold for some months to come. Although monthly core inflation rates, which exclude food and energy, have moderated from earlier this year, inflation is still higher than what most Fed officials would define as "price stability."

OIL - (From AFX) The global trend toward rising inflation and soaring energy prices will lead the agenda of a meeting of finance ministers and central bank governors in Australia this weekend. Australia is set to be the host of the two-day meeting of the Group of 20 nations, or G-20, in Melbourne starting Saturday. One of the agendas is to press the world's largest economies to make global oil markets more transparent and to shun a new trend of nationalism concerning resources. According to Costello, the Australian Treasurer, "We will try and get some common ground on the best way for big importers to get resource security at fair prices and the best way to ensure markets are open and functioning as a way of protecting against jockeying for resources between countries".

JPY - Fukui says that when it comes to the timing of any increase in interest rates, nothing is being ruled out, and that the economy is expected to continue to recover, led by solid domestic demand and brisk exports.

GBP - UK retail sales volumes shot up by 0.9% in October, resulting in an increase in annual growth from 3.0% to 3.9%. Expectations had centred on +0.3%mom and +3.2%yoy. There was broad based strength, with food the only component to record falls, down 0.2%. The data certainly added weight to the argument that the Bank of England may need to tightening policy further.

TODAY

USD - Inflation slowed sharply in the US last month, new figures showed yesterday, easing the pressure on the Federal Reserve and raising expectations of an interest rate cut next year. The core consumer price index rose 0.1 per cent in October, its lowest monthly increase since the spring.

JPY - Bank of Japan kept interest rates at0.25 per cent, after a low headline inflation rate of 0.2 per cent in September. But the central bank has made it clear that it is prepared to move pre-emptively against inflation.

EUR - French President said that he shares the sentiment together with the other euro-zone countries about the strength of the euro. His comments came soon after French Prime Minister Dominique de Villepin said this week that the ECB shouldn't be left to act alone on the exchange rate and that the strong euro was hurting exporters.

CNY - Mr. Bush is scheduled to sit down with a number of regional leaders, including Chinese President Hu Jintao on Sunday, to talk about trade, regional security and issues such as North Korea's nuclear program. His is on a weeklong visit to the Asian region.

Later

2030h - USD : Building Permits / Housing starts

G20 Meeting - Fuki is expected to touch on a weak JPY and there might be pressure on Asian Finance Ministers to have more Flexible Asian Currency in view of the rising Asian economies.

Fund Performance per day (inception date, 20 Oct 06) : -2.399%

Yesterday

USD - FOMC's minutes did not show any surprises. The Fed's main concern is to keep inflation at bay. According to the minutes, 'All members agreed that the risks to achieving the anticipated reduction in inflation remained of greatest concern.' The Fed felt that a slowing economic growth and less bullish commodity prices will eventually lessen inflation pressures. Some recent inflation barometers released since the Fed's October meeting have suggested that inflation is settling down. Fed policymakers said the housing slump was likely to remain a 'substantial drag on economic growth over the next few quarters.' However, most believed that the housing cooldown was 'likely to be no more severe than they had previously expected and that the risk of an even larger contraction in this sector had ebbed.'

GBP - Slight Hawkish stance from the Inflation report released yesterday from the BoE. In all, the Bank of England (BoE) is now forecasting a faster return in inflation back to the 2%pa target. This means that the BoE is done with rate hikes, but further rate hike in February next year would not be surprising.

EUR - Eurozone growth is starting to slow but remains robust and just outpaced the US again, according to official figures. Gross domestic product in the 12-country region rose by 0.5 per cent in the three months to September, after a 0.9 per cent rise in the previous quarter. That suggested that the best of the eurozone's recent economic recovery might have passed, but without any dramatic slowdown having yet taken place. The strength of eurozone growth, and the extent to which investment has replaced exports as the motor of growth, suggests that the impact of a US slowdown may be modest.

JPY - (From AFX) The Japanese economy grew twice as fast as expected in the second quarter, the government reported Tuesday, raising expectations that the Bank of Japan would raise interest rates by early next year. Corporate investment in factories and equipment surged, helping gross domestic product to rise for the seventh straight quarter. The economy expanded at an annualized rate of 2 percent, the Cabinet Office said in Tokyo, while second-quarter growth in Japan was revised to 1.5 percent from 1 percent. Traders will focus on the BoJ's meeting later at 1130h, and most exepct Fuki's stance to be hawkish.

Later

1130h - JPY : BoJ speaks at conference.

1600h - EUR : Italian Trade Balance

1630h - GBP : Retail Sales

1700h - EUR : Eurozone CPI

2030h - USD : CPI

Fund Performance per day (inception date : 20 Oct 06) : -2.73738%

Yesterday

GBP - GB showed signs of inflation following the BoE largely expected rate last week. Generally, the figures found little fanfare and the GBP/USD cross actually slid on initial reaction. It was probably due to renewed interest in the underlying Dollar. However, these figures suggest that there might be another rate hike by the first quarter of next year

JPY - (From AFX) The BoJ is reining in money supply too quickly, an "irrational" policy that is contributing to weakness in the economy, Heizo Takenaka, architect of the previous administration's economic policy, told the Financial Times. Mr Takenaka, a former financial services minister often credited with laying the foundations for Japan's current recovery, said the BoJ was rushing to normalise monetary policy. "It will take two or three years to normalise the situation," he said. "But the BoJ is too urgent, too rapid." Since March, when the BoJ ended its ultra-loose monetary policy, the central bank has been draining liquidity, and in July it raised interest rates to 0.25 per cent, the first increase in six years. Mr Takenaka said it was premature to squeeze money supply so aggressively when prices, as measured by the gross domestic product deflator, were still dropping 0.8 per cent a year. "Who is responsible for that?" he said. "Is the government responsible for that? Are companies responsible for that? No. The BoJ is responsible for that." The outspoken Mr Takenaka, who has returned to academia since leaving the government in September, has been a long-time critic of the central bank. But his latest attack is particularly blistering in linking the current economic slowdown with BoJ policy.

USD - (From AFX ) Renewed Consumer Confidence is showing. Consumers across the United States are continuing to make tracks for malls and shopping centers, defying the forecasts of some economists who predicted the year-long housing slump would keep them at home. Combined with falling energy prices and a pickup in job and income growth, the buying spree heralds robust holiday sales and economic momentum heading into the new year, economists say. A strong U.S. economy bodes well for global growth…Retailers, who were apprehensive earlier this year when gasoline prices exceeded $3 a gallon, or 80 cents a liter, are breathing easier... Consumer resilience goes a long way in explaining the Fed's confidence that the economic expansion will march on. "The 95 percent of the economy outside of housing remains on good footing," Michael Moskow, president of the Federal Reserve Bank of Chicago, told business leaders in his city last week. The outlook has not been lost on investors, who pushed the Dow Jones industrial average to a record close last Wednesday. The Standard & Poor's 500 consumer discretionary index, which includes stocks of 86 companies directly dependent on consumer spending - like Starbucks, Nike and Bed Bath & Beyond - is up 15 percent over the past three months. October sales at Federated Department Stores, which owns Macy's and Bloomingdale's; J.C. Penney; and Nordstrom exceeded projections. And there is cause for more optimism, according to the accounting firm Ernst & Young, which estimates that Americans will spend 6.5 percent more this November and December than a year earlier.

Oil - The International Energy Agency said global energy demand will jump in the fourth quarter because of U.S. consumption, while demand for oil produced by the Organization of Petroleum Exporting Countries will rise to its highest level in four years. The IEA said global demand for OPEC oil is expected to rise 1.6 million barrels a day in the fourth quarter from the third quarter because of weaker output from non-OPEC countries. The IEA trimmed its outlook for growth in 2006 global oil demand to 1.1% from 1.2% in its October report.

Today

JPY - (From UBS) This morning Q3 GDP came out stronger than expected at 0.5%q/q against 0.2%q/q consensus and Q2 GDP was revised up from 0.2%q/q to 0.4%q/q. This helped the Nikkei rally almost 1.70% this morning and the JPY to recover lost ground across the board. The stronger than expected data will help the BOJ prepare the case for a rate hike in December but economics minister Ota and finance minister Omi both were on the wires this morning calling on the BOJ to keep supporting growth

Later

1630h - GBP : CPI

1730h - EUR : Eurozone ZEW Survey / EuroZone GDP

2030h - USD : PPI

Fund Performance per day ( inception date, 20 Oct 06) : -0.0293%

GBP - Bullish, Halifax said house prices were up in October, but there were actually some signs of a slowdown on the way for the months ahead. There are signs that there is deceleration of activity in RICS surveys and a drop in the numbers looking for a new home, based on data from the Home Builders Federation.

NOK - (FRom AFX) October's inflation figures was above expectations and Norges Bank's forecasts from its recent Inflation Report. Norges Bank's decision to focus on the risk of an over-heated domestic economy rather than the stubbornly low inflation rate may have left the market more muted. We still see further upside risk to yields at the very front end of the curve as Norges Bank is expected to step up its rate hiking speed looking forward. The Bank is probably done for this year but will most likely start 2007 with a 25bp rate hike to 3.50%. Next significant data release will not be until the very end of November when unemployment data and the credit growth indicator are due (30-Nov).

USD - (From AFX) People's Bank of China governor Zhou Xiaochuan said China is not planning to accelerate the diversification of its currency reserves. 'We stick to the existing policy,' Zhou told reporters on the sidelines of a European Central Bank conference. 'We have many years of currency diversification policy,' he said. The dollar fell yesterday when Zhou was reported as saying that China has a very clear plan to diversify its reserves. But asked today whether China is shifting currency reserves and selling dollars, Zhou said: 'No.' Chinese government-linked analysts said earlier that markets had overreacted to Zhou's remarks yesterday.

JPY - According to Daiwa Institute of Research senior economist Junichi Makina, the unexpected decline in core private sector machinery orders for September shows that companies have begun to curtail their capital spending amid growing uncertainty over domestic demand. 'Orders from automakers, as long as offshore demand remains solid, are not likely to notably weaken,' Makino said. 'The same theory can also be applied to the prospect for overall capital spending. And, as long as offshore demand remains brisk, overall capital investment -- even if it is losing the strong momentum it has seen in the past -- will not be falling into a serious downtrend,' Makino said.

Fund Performance per day (inception date, 20 Oct 06) : -3.02143%

Bias : Short Term Indicators show that the CAD is undervalued by traders.

AUD / NZD - (From UBS) NZ employment data this morning disappointed market expectations and sent the NZD lower. Employment for Q3 contracted by -0.4% q/q against market expectations of a +0.2% q/q expansion, while the unemployment rate rose to 3.8% versus expectations of a 0.1 percentage point rise to 3.7%. The data looks genuinely soft and seems to be a payback for strength in the labour market in H1. Meanwhile, Australian labour force data also disappointed. Employment for October fell by -32.1k against expectations of a +7.5k gain, while the unemployment rate held steady, but purely due to a deterioration in the labour force participation rate. The bad data could be a one-month blip, but more likely is a reflection of a slowing domestic economy. The next month's employment survey will be critical in that assessment.

EUR - (From AFX) Economists surveyed by the European Central Bank have raised their forecasts for euro zone growth in 2006 and 2007, the ECB said in its November monthly bulletin. The average forecast for 2006 inflation from experts taking part in the ECB's Survey of Professional Forecasters (SPF) rose to 2.6 pct from 2.2 pct... This forecast measures inflation expectations five years ahead. The ECB aims to keep inflation below, but close to, 2.0 pct over the medium term. Also, Germany's top economists issued a devastating verdict yesterday on the policies of Angela Merkel, the chancellor, saying they had become hostage to "contradictory political interests". The annual report of the "council of wise men" which advises the government underscores mounting disappointment among experts and business at the government's inability to use the strong recovery to push through reforms... The report's harsh assessment, coupled with its optimistic view of the current economic rebound and a higher-than-expected growth forecast for next year, underlined the growing rift between Germany's robust performance as an economy and the lack of progress in structural reforms.

USD - (From AFX) U.S. policies are about to undergo a significant realignment following the huge victory handed to Democrats in Tuesday's U.S. elections. With Iraq policy sure to be among the Democrats' highest-priority targets, President George Bush sought to reclaim the initiative Wednesday by announcing the resignation of Defense Secretary Donald Rumsfeld to make way for "fresh perspective" on the issue to come from former Central Intelligence Agency director Robert Gates. While Democrats are assured of a big majority in the House of Representatives and might just squeak to a one-seat majority in the Senate, it doesn't mean the Republican president will face gridlock. Some divided governments of recent years have yielded some of Washington's best-known achievements, as Washington reporters Jackie Calmes And David Rogers note. And though oil companies might face a reduction in tax breaks, drug companies might face a tougher environment and the outlook might dim for extending the president's authority to negotiate new trade deals, heightened Democratic power might be beneficial for business in other areas. Democrats might try to ease labor shortages by creating a guest-worker program, especially after receiving resounding support from Hispanics. They might seek to spread the benefits of globalization more widely, shield workers from its blows, revamp worker training and retraining programs and push alternative energy.

JPY - The Japanese economy probably grew at about the same pace as the previous quarter in the three months to September with strong car exports to the US countered by a decline in consumer spending, economists said. The projected drop in consumer spending, which makes up 55 pct of the world's second-largest economy, will be the first in seven quarters, and along with expectedly weaker capital investment by Japanese companies, could convince the Bank of Japan to hold off another hike in its key interest rate for the rest of the year, some economists said.
Japan's gross domestic product is projected to have grown by 0.3 pct in real terms in the September quarter compared to the previous three months, or at an annualized rate of 1.2 pct, based on the average estimate of 10 economists polled by XFN-Asia.

Later

1900h - GBP : BoE Rate Decision

2030h - USD : Trade Balance / Import Price Index / Initial Jobless Claims

2030h - CAD : New Housing Price Index / International Merchandise Trade

2200 h - USD : U.Michigan Confidence Index

2230h - GBP : Leading Indicator Index

Fund Performance per day (inception date, 20 Oct 06) : -3.28702

Today

USD - The US dollar was mainly softer against most major currencies. The mid term election results have been announced. As expected, the Democrats have regained control of the House of Representatives for the first time in 12 years. With the uncertainty regarding the elections is largely out of the way, financial markets will start to focus again on the health of the US economy and the housing market in particular. In the long term, given the recent healthy employment report, we do not expect to see the Fed cut rates this year, but possibly early next year. Tonight, Fed's Moskov will speak at 2110h on the US Economic outlook.

EUR - German Industrial Sales and better than expected Trade Surplus Figures sent the EUR higher against most majors. Europe's economic policymakers clashed yesterday over whether higher interest rates are needed to contain inflation, as the region looks forward to another two years of strong growth. Hawks at the European Central Bank are troubled by the inflationary outlook, with one member of the bank's rate-setting board claiming that the rise in consumer prices and credit was "alarming". But some EU finance ministers meeting in Brussels take a more dovish stance, pointing to the European Commission's autumn forecast which shows inflation set to fall below the ECB's2 per cent target in 2008.

JPY - BOJ policy board member Mizuno made a speech on the Bank's semi-annual report in a closed-door seminar overnight. According to the text later released by the BOJ, his remarks
were somewhat hawkish. Although he did not stick to a rate hike in the rest of the year, he said that the BOJ should conduct gradual interest rate adjustment if weakness of data can be
seen as temporary ahead of the year-end. The Cabinet Office reported that the September leading economic index was 20.0%, below the watershed of 50% for three months in a row. With a softer dollar and stronger Yen, we could see the USD/JPY head towards 115 levels.

Later

2015h - CAD : Housing Starts

2110h - USD : Fed's Moskow speaks on US Economic outlook

0445h - NZD : Unemployment rate

0650h - JPY : M2 Supply

Fund Performance per day (inception date, 20 Oct 06) : -3.61390%

Today

EUR / USD - (From AFX) Even though the latest opinion polls show President George Bush's Republicans closing the gap, most observers expect to see the Democrats take control of at least the House of Representatives. If they do so, then the Democrats will be in a position to drive the policy agenda in the run-up to the next Presidential election in November 2008. Analysts said today's data did little to alter market expectations on the outlook for interest rates even though euro zone retail sales and German industrial production data disappointed to the downside. The market expects the European Central Bank to lift its key refi rate another quarter point to 3.50 pct in December and to tighten again early in the new year. European issues have been battered since Friday's unexpected news that the unemployment rate in the US fell to a five-year low in October. Michael Moskow, president of the Federal Reserve Bank of Chicago and a member of the rate-setting Federal Open Market Committee next year, said his concerns about inflation outweighed those over growth, and added that further tightening may be necessary to bring inflation down to a comfortable level within a reasonable timeframe. Analysts said upcoming speeches from ECB president Jean-Claude Trichet and Fed chairman Ben Bernanke will be closely monitored in light of the recent comments.

GBP - Over in the UK, gilts were supported by a similar pull-back in the wake of the recent losses. The key event in the UK this week is the Bank of England's expected rate hike to a five-year high of 5.00 pct on Thursday and the accompanying statement.

EUR -Europe was yesterday given an upbeat economic report card, with predictions of healthy growth into 2008, falling unemployment, low inflation and a gradual return of order to the continent's public finances. Joaquín Almunia, EU monetary affairs commissioner, used his autumn economic forecast to claim that Europe's recovery was robust and well placed to withstand a downturn in the US or a return of higher oil prices.

USD - The Republican party intensified last-minute efforts to rally support yesterday amid widespread expectations of a strong Democratic showing in today's congressional mid-term elections. Citing an ABC-Washington Post poll that showed the Democratic lead narrowing to six percentage points from a double-digit margin last week, Republican strategists said their volunteers had made direct contact with 27m voters, far more than the Democrats.

JPY - Fukui said the central bank will take preemptive monetary policy action even before confirming a clear signal of inflation to avoid a boom-and-bust business cycle. The BoJ chief offered no specific hints for the next move after holding short-term interest rates steady since the bank conducted its first rate hike in six years in July. He maintained that the BoJ's policy is 'forward-looking.' 'It's not like we are doing nothing until we see a sign (of higher inflation),' he said. 'If the central bank changed interest rates only after confirming certain inflationary pressures, fluctuations in the economy might become too sharp.' To steer the economy away from such wild swings, the central bank will 'fine-tune' its monetary policy through 'preemptive' actions, Fukui said. 'Our communication with market participants are already in process even before we issue our (semi-annual) Outlook ... so when the target (overnight) rate is changed, there would be no surprise to them.

Later

0530h - AUD : RBA's rate decision

0730h - GBP : Nationwide Consumer Confidence

1200h - JPY : Leading Economic Index

1400h - EUR : German Trade Balance / German Current Account

1800h - EUR : ECB's Hurley speaks in Dublin

Fund Performance per day ( inception date, 20 Oct 06) : -4.2048

Today

EUR - (From AFX) The euro dipped against the dollar after a key survey of euro zone services sector activity came in below expectations, while weak data on UK industrial and manufacturing output weighed on the pound. Nevertheless, the headline index remains well above the 50 level which indicates expansion in the sector and continues to point to robust economic growth. It will do nothing to alter market expectations that the European Central Bank will raise interest rates again next month, analysts said. Though the weaker UK data will do nothing to prevent the Bank of England from raising interest rates by a quarter point to 5.00 pct on Thursday, it will raise speculation that rates may not rise any further in 2007.

USD - Elsewhere, the dollar remained well supported after Friday's strong US employment data. Though there is little in the way of US economic data this week, market players will be watching speeches later today by Chicago Federal Reserve president Michael Moskow and Cleveland Federal Reserve president Sandra Pianalto. A victory by the Democrats in the U.S. midterm elections Tuesday would help to shrink the U.S. budget deficit, which ballooned to a record during George W. Bush's presidency, according to analysts. Polls and pundits suggest that the Democrats might pick up the 15 additional seats that they need to take control of the House of Representatives, and they are within striking distance of the six seats that they need for a Senate majority. When the Democrats lost the House in 1994, the budget went from a deficit of $164 billion in 1995 to a surplus of $236 billion in 2000. Under Bush, the surplus became a $413 billion deficit at its peak in 2004.

Later

2200h - CAD : Ivey Purchasing Managers Index

0710h - USD : Fed'e Yellen speaks on Economics

0930h - JPY : Governor Fuki speaks at conference

1345h - CHF : Unemployment Rate

1600h - EUR : Bloomberg Eurozone Retail Sales

1700h - EUR : Eurozone Retail Sales

1800h - EUR : German Industrial Productions

Fund Performance per day (inception date, 20 Oct 06) : -4.70625%

Friday

USD - The dollar gained strength on stronger than expected ISM and NFP data. The unemployment rate was at 4.4% which is a 5.5 year low. ISM Manufacturing data rose to 57.1 from 52.9. Equities and Treasuries ended lower on a less probable outcome than the Fed will cut rates in future. Watch for the mid term elections on Tuesday as America goes to the poll - a Democrat win could be dollar negative. In equities, we see cautious trading ahead of the mide term election results.

CAD - A stronger emplyment data saved the CAD from further falls. But unless Bank of Canada Governor Dodge or Deputy Governor Longworth clarify things in their speeches next week, we could see the CAD continue to suffer from the remnants of the surprise tax on income trusts.

Later

1645 - 1600h : EUR - Eurozone PMI / German PMI

1630h :GBP - Industrial / Manufacturin Production fugures released

1700h : EUR - Eurozone PPI

1800h : GBP - German Factory Orders

2030h : Fed's Moskow speaks on US Economic outlook in Chicago

Fund Performance (inception date, 20 Oct 06) : -4.48%

Yesterday

USD - The dollar was generally stable overnight. There were not much price movement in the crosses against the JPY and the EUR.

EUR - ECB announced that it will keep rates unchanged. The FX Markets however offered little more than a quiet reaction. It is possible that the markets had already priced Trichet's hawkish stance, who also guaranteed that the ECB will raise rates in December. All eyes will be on the US non-farm payrolls due for release at 2030h, if payrolls are better than expected, we could see a major decline of the EUR/USD. On the other hand, if payrolls are worse off, we could see more downward pressure on the USD/JPY.

Later

1700h - EUR : Eurozone Retail Sales

1900h - EUR : Eurozone Unemplyment Rate

2030h - USD : Non Farm Payroll

2200h - USD : US ISM Non Manufacturing

Fund Performance ( inception date, 20 Oct 06) : -5.47440

EUR - (From AFX) "The European Central Bank is widely expected to signal Thursday that it will raise interest rates in December, the sixth increase in a year. But the truly tricky task still awaits the bank: Will it keep going in 2007? The answer, central bankers and ECB watchers suggest, is closer to yes than no. But the timing is very much up in the air. As the economy of the 12-nation euro area has gained momentum over the past year, the ECB - like other central banks, notably the U.S. Federal Reserve - has tightened credit to guard against a resurgence of inflation. A rapid growth rate tends to feed inflation as thriving businesses raise prices and eager consumers pay them. For most of the year, inflation has run slightly above the bank's target of "close to, but below 2 percent," providing one rationale for increasing rates. In October inflation dropped below that level for the second month in a row, to 1.7 percent, the European Union's statistics agency, Eurostat, said Tuesday. But the ECB has already said it regards the dip as a temporary byproduct of lower oil prices, suggesting it would not be deterred from further tightening. New support for the ECB's case that the euro-zone economy is humming came Tuesday when France reported that its unemployment rate in August had dropped to 8.8 percent, the lowest level in five years. But whereas the Fed suspended its two-year string of rate increases last month, amid signs that the U.S. economy was cooling, the ECB is much less certain about what lies ahead. Because of slower U.S. growth, Americans are likely to snap up fewer European exports. And the sharp increase in sales tax in Germany on Jan. 1, to 19 percent from 16 percent, may dent consumer spending in Germany, which has Europe's largest economy. These two factors will help determine how fast the European economy grows next year. More good economic news probably means more interest rate increases early in the year. Unexpectedly weak growth could lead the bank to stand pat.

USD - (From AFX) The dollar fell against most major currencies Wednesday after two economic reports showed more evidence of a sluggish U.S. economy. In afternoon New York trading, the 12-nation euro bought $1.2776, up from $1.2767 in New York late Tuesday. The British pound climbed to $1.9118 from $1.9077. The dollar weakened against the Japanese currency, slipping to 116.89 yen from 116.92 yen on Tuesday. The U.S. manufacturing sector expanded at its slowest clip in more than three years in October, according to a trade group.

Later

1345h - CHF : Swiss CPI YoY

1400h - EUR : German IFO Unemployment Rate

1545h - EUR : Host of PMI Data

1600h - EUR : Euro Manufacturing PMI

1630h - GBP : PMI Construction

1945h - EUR : ECB announces Int Rate