Fund Performance per day (inception date : 4 Dec 06) : 0.97166%

25 Jan 07

JPY (Turning Bullish) - The increase in the trade surplus last month confirms that exports remain strong and therefore that US consumer spending is resilient, Daiwa Institute of Research Institute senior economist Junichi Makino said. 'The latest data clearly showed that US consumer demand for Japanese-made products such as automobiles remains strong, as the collapse of the housing market there has not so far weakened purchasing power.'The prolonged solidity of exports, led by shipments to the US, is likely to continue to support the Japanese economy at a time when domestic private consumption is sagging,' Makino said.

24 Jan 07

NZD - (Bullish) The Reserve Bank of New Zealand surprised markets through its interest rate announcement, leaving the Overnight Cash Rate at 7.25 percent but hinting that the next rate move would likely be a hike. As often occurs with fundamental data releases, markets posted a knee-jerk reaction to the headline number, only to reverse course when the full implications of the news became clear.

Later

1510h - EUR : German Consumer Confidence

1700h - EUR : German IFO (Jan)

1700h - EUR : Euro Current Account (Nov)

1900h - NZD : Purchasing Managers Index

2300h - USD : Exisiting Home Sales

Fund Performance per day (inception date : 4 Dec 06) : 0.71589%

19 Jan 07

USD (Gaining Strength) - Federal Reserve Chairman Ben Bernanke warned that rising health-care and Social Security spending could create a "vicious cycle" of rising debt and interest payments and an eventual fiscal crisis. The Fed could keep or raise interest rates to encourage Americans to save up and keep inflationary pressures at bay.

JPY (Neutral) - Japan needs to see more economic strength to lend more weight for the BoJ to increase rates. Personal consumption remains sluggish: wages are stubbornly flat, discouraging spending. The household consumer index shows confidence last month hit its lowest ebb in two years. Stripping out energy, Japanese prices are still falling. Unfortunately, that is not the case championed by the hawkish Bank of Japan, which has been stressing its "forward-looking" credentials and a rosier outlook.

EUR (Bullish) - European Union Economic and Monetary Affairs Commissioner Joaquin Almunia said the risk to growth of a three percentage-point rise in German sales tax, instituted Jan. 1, "has been overestimated," He forecast Germany and France would continue to cut public deficits, contributing to a wider correction in euro-area budget imbalances.

22 Jan 07

1500h - EUR : German PPI

1615h - CHF : Producer and Import Prices

Fund Performance per day (inception date : 4 Dec 06) : 0.05957%

Yesterday

JPY - (Turning Bullish) Japan's economic expansion recently has been a one-sided affair: Corporations are booming, but consumers are not benefiting. Japanese corporate earnings are expected to rise this fiscal year for the fifth consecutive time. Stock and real-estate prices are climbing -- a contrast to the declines they experienced for a decade until the early 2000s. Help-wanted signs are everywhere, and the jobless rate fell to an eight-year low of 4% in November. The economy as a whole has been expanding for nearly five years. But one key element has failed to materialize: Growth in workers' wages. Even as many Japanese companies report record earnings, they aren't sharing the fruits with employees.

USD - (Neutral) Policymakers and bond market investors alike appear more confident about the resilience of the broad US economy in 2007, with its still-thriving service sector, strong jobs market and improving exports. The data is giving mixed signals, with some measures suggesting that the housing market is bottoming out, while others point to further weakness to come. Even if demand for houses does remain stable at current levels, both construction and house prices could face continued weakness because of the large overhang of unsold homes - 6.3 months of sales for new homes in November (more if adjusted for cancellations).

Oil (Range Bound) - The Organisation of the Petroleum Exporting Countries, the oil cartel, is becoming increasingly concerned but also hamstrung about what to do about the recent 15 per cent drop in oil prices. Members such as Saudi Arabia, the group's biggest and most powerful exporter, fret that another move to cut output could damp prices even more if members do not stick to last year's agreement to cut production. One of the problems for Opec is that nobody seems sure why oil prices have fallen so dramatically. Fundamental supply and demand conditions seem to contradict it - making the challenge faced by the 11 members, who deal in real barrels rather than futures contracts, even greater.

EUR (Bullish) - German labor unions accepted meager pay raises for several years in the face of slow economic growth, high unemployment and the threat of companies shifting jobs to cheaper locations. This year, many union leaders have decided it is payback time. In the wake of healthy economic growth and fat corporate profits last year, key unions are making a push for wage increases of roughly triple the inflation rate. Such raises could boost consumer spending in Europe's largest economy, but employers worry it would erode gains in cost competitiveness that have helped Germany lead Europe's economic recovery as it became the world's largest exporter in terms of value. If German pay increases outstrip productivity gains, they could force the European Central Bank to raise interest rates aggressively, crimping growth in the 13-nation euro zone, economists say. After adjustment for inflation, wages went flat in 2002 and have declined the past couple years.

Later

1300h - JPY : Consumer Confidence

1500h - EUR : German CPI

1800h - EUR : Euro zone CPI

2130h - USD : USD PPI

Technicals

Trade strategy : Buy EUR.JPY at 15525-15555 , stop below 15420, Target: 15720, 15780, 15805.If the EUR.JPY trades lower than 15420, then should sell EUR.JPY, stop above 15530.

Fund Performance per day (inception : 4 Dec 06) : -0.95259%

Friday

USD (Slight Bearish) - Federal Reserve officials may be beginning to share the bond market's pessimism about the outlook for economic growth, a summary of the Fed's Dec. 12 policy meeting shows. At that meeting, the Fed left its short-term interest-rate target at 5.25% and said afterward that inflation was its principal concern and that any decision on raising rates would depend on incoming data. The summary said that "several" of the Fed's 11 voting policy makers thought the "subdued tone" of some recent economic indicators "meant that the downside risks to economic growth in the near term had increased a little and become a bit more broadly based than previously thought."

EUR (bullish) - German unemployment last month recorded its biggest monthly drop since the country's reunification 17 years ago, underscoring the strength of the rebound under way in Europe's biggest economy. The data mean that German unemployment fell by 597,000 last year…This "extraordinary decrease in unemployment", as the agency described it, put the jobless rate at 9.8 per cent. The data follow upbeat business sentiment surveys at the end of December and will buttress the view shared by most economists that the strong German recovery will last well into 2007, in spite of a three-point rise in value-added tax this month. The Ifo business sentiment index surged to a 16-year high last month after notching up the fastest growth in 2006 since the start of the decade.

Monday

USD (Bullish) The home-building industry is about to stop hurting the U.S. economy and later this year may start to help it. The housing demand that is beginning to stir may be unleashing faster growth. Housing prices surged this decade in Australia and Britain, peaking earlier than in the United States. Falling prices and sales in those countries proved to be only a temporary drag on economic growth, followed by rapid recovery.

Later

1500h : EUR - Trade Balance

1900h : EUR - German Industrial Production

Fund Performance per day (inception date : 4 Dec 06) : 0.99452%

Yesterday

USD (Bullish) - The Federal Reserve thinks that some inflation risks do remain. It would be a shock to investors if the next move in short-term rates turned out to be up instead of down. At the moment, investors remain focused on the risk of weakness in housing activity cutting directly into economic growth, as well as the danger it poses to consumer spending. Interest rate futures are pricing in almost two quarter-point cuts by the Fed this year. But there is a different scenario. Imagine if the housing market's dramatic slowdown were to level off, as it did in the UK, and then show signs of renewed strength. But if consumer spending in general holds up, the rest of the economy continues to chug along, and the US benefits from strong growth elsewhere in the world, things could look rosier further into the year. While the most likely direction for rates is still down, it remains possible that 2007 will not bring the looser monetary policy some investors are banking on.

EUR (Bullish) Europe's manufacturing sector steamed into 2007 with strong growth amid buoyant global demand, according to a closely watched survey of purchasing managers released Tuesday that also highlighted growing divergences between Germany and France, the two largest economies in the 13-nation euro zone. Makers of everything from trucks to machine tools to chemicals reported that activity during December kept up the strong pace that emerged around mid-2006. German manufacturers have been profiting for years now from a strong global expansion, but in recent months they have also seen the awakening of long-dormant consumers. Unemployment fell below four million, to 9.6 percent, in November, giving people more money to spend on consumer goods like cars and appliances, and is likely to sink another notch when new figures are reported on Wednesday…The euro zone is beginning the year with strength, economists believe.

Today

USD (bullish) - Federal Reserve Board Chairman Ben Bernanke and his colleagues on the Federal Open Market Committee continued to view the current rates of core inflation as 'uncomfortably high' at their meeting last month and pledged to watch incoming economic data closely before making a decision about interest rates scheduled to take place at the end of this month. 'Members agreed that the statement should continue to convey that inflation risks remained of greatest concern and that additional policy firming was possible,' the Fed said, according to the minutes of the Dec 12 meeting, released today. Nearly all FOMC members thought the slowdown in the housing market was likely to lower economic growth in the near term, though the negative effects would likely dissipate over time.

Later

1445h : CHF - CPI

1655h : EUR - German PMI

1700h : EUR - Euro-zone PMI

1730h : GBP - M4 Money Supply / PMI

1800h : EUR - CPI Estimates

1830h : GBP - Gfk Consumer Confidence

Fund Performance per day (inception date : 4 Dec 06) : 1.0437%

Today

USD ( Neutral) : The US dollar was slightly softer in afternoon trade here, probably because Japan is having a holiday. USD is struggling to find support as investors chase higher yielding currencies such as the Australian and New Zealand currencies. Markets will probably be quiet until Friday's non farm payroll figures.

AUD / NZD (Bullish) : Markets are expecting the Reserve Bank of Australia will hike interest rates by 25 basis points next month to 6.50 pct. Trading in 30-day interest rate futures contracts shows bets have doubled in the past month that the RBA will raise its official cash rate next month. The New Zealand dollar meanwhile is being supported by expectations the Reserve Bank of New Zealand will raise it's official cash rate by 25 basis points this month to 7.50 pct.

JPY (Neutral) : Excerpts of BoJ Deputy Gov Toshiro Mutoh interview indicates the BoJ might still raise rates in January. On FX, JPY could be a touch supported by the ongoing debate about January rate hikes

Later

USD (Might turn bullish) : Look out for the ISM Manufacturing and Non Farm Payrolls. Figures might turn out to be more bullish than expected. Both might point to potential dollar strength towards the end of the week.

1655h - EUR : IFO Unemployment Change / IFO Unemployment Rate

2300h - USD : Construction spending / ISM Manufacturing

0645h - NZD : Exports / Imports

Technicals

Markets range bound, Pace of the markets should pick up from tomorrow onwards.