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