Portfolio Performance : + 7.95%

Actions : Did some intra-day trading on the EUR/USD

Headline News

1. MISHKIN says FOMC should extend economic projections to five years
2. Fed Mishkin says FOMC should only change inflation consensus only when economy changes
3. Miskin says that an announced inflation goal would help foreign investors
4. The Bush Adminstration on Monday cut its budget deficit forecast for the current year but expanded it to a record $482 billion for 2009 as the weakening US economy slows revenues and spending remains high
5. The US Treasury Department announced today that it expects to borrow billions of dollars more in marketable debt this quarter than originally forecasted, in part due to increased outlays like the $150 billion fiscal stimulus program
6. Japan's June unemployment rate 4.1%, higher from May by 0.4%
7. Japan's June household spending lower by 1.8% year on year
8. Singapore State investor Temasek Holdings said on Tuesday it had increased its investments in Merrill Lynch as part of the US broker's latest fund-raising effort
9. Australia's quarterly survey measure of overall business conditions fell 7 points in the second quarter to 6 points, the lowest reading since 2001
10. Taiwan index of leading indicator was unchanged in June vs May
11. The Philippine central bank said on Tuesday it expected annual inflation to come in a range of 11.2-12%
12. German wages among employees and workers have increased an average of 3.5% in April compared with the same month last year
13. Dutch July Consumer Confidence falls to plus 2.4 from plus 5.3 in June
14. The Russian Central Bank injected 192.2 billion roubles of one-day funds into the banking system at a rate of 7.02% in its first auction of the day today
15. UK Mortgage approvals slump to 36,000, the lowest since the series began in 1993
16. The National Development and Reform Commission, China's top planning agency has published broad guidelines for economic reform - the government will study and speed up reforms to property tax and study and begin to levy an environmental preservation tax, speed up restructuring of the Agricultural Bank of China and China Development Bank, push for the establishment of a growth enterprise market where smaller companies can list and expand the issuance of corporate bonds and more
16. Bank of China said that its British subsidiary had bought 30% stake in Switzerland's Heritage Fund Management for 9 million Swiss Francs
17. German july preliminary CPI higher by 0.6% from June
18. US May S&P/Case Shiller Home Price index down 16.9% year on year
19. US July consumer confidence rises to 51.9 vs 50 expected

My expectation for the USD crosses

1. EUR : Negative
2. AUD : Negative
3. GBP : Negative
4. CAD : Negative
5. JPY : Positive
6. CHF : Negative

Bottomline : I expect a very strong rebound in the US dollar, the equity market is expected to head higher.

Portfolio Performance : +7.09%

Headline News

1. Approximately $17.7 billion in primary credit was outstanding as of Wednesday.
2. Net portfolio holdings of Maiden Lane LLC, the company formed to facilitate JP Morgan Chose acquisition of Bear Stearns totaled $29.1 billion, higher from $29 billion in the previous Wednesday
3. South Korea expanded 0.8% in the June quarter, the same pace as March and as expected by the market
4. Japan core CPI higher by 1.9% year on year, overall CPI higher by 2%
5. Singapore june factory output higher by 2.5% year on year, less than estimates
6. German import prices higher by 1.5% from May, higher by 8.9% year on year
7. Euro Zone June M3 higher by 9.9% year on year from 10.1% in March-May
8. Taiwan M2 money supply higher by 1.7% year on year
9. According to China, it is facing increasing challenges in maintaining fast and stable economic growth amid growing international uncertainties and domestic economic difficulties
10. US Durable goods orders rose unexpectedly in June as autos posted their largest monthly gain in almost a year
11. US late Michigan consumer sentiment rises to 61.2 vs 56.4 expected
12. New home sales fell to 0.6% to a seasonally adjusted annual rate of 530 000 units, the lowest level since March.


My expectation for the USD crosses

1. EUR : Negative
2. AUD : Neutral
3. GBP : Positive
4. CAD : Neutral
5. JPY : Neutral
6. CHF : Neutral

Bottomline : Another quiet day for the market, I expect the market to trade the US dollar sideways.

Portfolio Performance : +6.76%

Headline News

1. Fed Beige Book said that pace of economic activity slowed since last report
2. Beige Book sees elevated or increasing price pressures in all Fed districts
3. The Reserve Bank Governor Bollard said "Provided that the outlook for inflation continues to improve and there is no excessive exchange rate depreciation, we would expect to lower interest rates further" - this is the first rate cut since July 2003
4. Japan June Surplus 138.6B Yen vs 1.24 Trillion Yen a year earlier, on a 88.9% drop in exports (this is huge)
5. Vietnam's inflation in July estimated to hit an annual rate of 27.04%
6. Korean won rose as foreigners bought Korean stocks after a 33 day selling streak
7. OECD says Indonesia needs to improve the business environment and make better use of labour inputs to put the economy on a higher growth trajectory
8. Thailand central bank reiterated on Thursday its policy priority at the moment was maintaining monetary stability rather than economic growth
9. French July Business Climate Indicator 98 vs 101 in June
10. French Provisional July Service PMI 47 vs 50.1 in June
11. Spanish Q2 unemployment hits 3 year high of 10.4%
12. German July Provisional Service PMI 53.3 vs consensus of 51.4
13. Euro Zone May Current Account Deficit 7.3 billion Euros vs Surplus 1.5 Billion in April
14. German IFO Business assessment index 105.7 vs 108.3 in June
15. Euro Zone July manufacturing PMI falls to 46.9 from 49.6 in June
16. IFO says that july index results suggest Economic upswing coming to an end
17. Hong Kong June exports lower by 0.6% year on year vs higher by 10.3% in May
18. UK retail sales higher by 2.2%, the lowest since Feb 2006
19. US jobless claims +34K to 406K, 375K expected
20. US June existing home sales lower by 2.6% to 4.86 million

My expectation for the US dollar crosses

1. EUR : Negative
2. GBP : Positive
3. CAD : Neutral
4. JPY : Neutral
5. CHF : Neutral
6. AUD : Negative

Bottomline : Quiet market today. I expect the US dollar to gain in strength, this comes on the weakness of commodities.

Portfolio Performance : +6.75%

Headline News

1. Fed Meeting Minutes showed that two Fed bankers favoured a rate hike in June, namely the Fed Reserve Bank of Kansas City and Dallas.
2. The minutes concluded that downside risks to the economy were outweighed by upside risks to inflation.
3. ABC Consumer Confidence Comfort Index -41 this week from -41 the previous week
4. ADB Economist Lee Jong Wha said that Singapore's appraoch to allow the SGD to appreciate is in the right direction, but should also boost fiscal spending
5. Australia Q2 Headline CPI higher by 4.5% year on year vs 4.3% consensus
6. Indonesia central bank said that inflation will remain the main concern for Indonesia over hte next 12-18 months, but a gradual and non-aggressive hike in interest rates ahead will be enought to contain inflation
7. Singapore June CPI higher by 7.5% year on year, below estimate of 8% year on year
8. French June consumption lower by 0.4% from May
9. Iran Vows no retreat in Nuclear Row
10. Spanish June Producer Price higher by 9% year on year
11. Taiwan June Exports higher by 9.27% year on year, vs 14.46% higher by May
12. Romania's consolidated budget deficit may reach 3% of GDP next year if the pension budget runs out of cash to fuel planned state pension hikes
13. UK June Mortgage Approvals slump to new all time low of 21,118
14. BOE kept interest rates unchanged
15. Euro Zone May Industrial Orders lower by 4.4% year on year
16. Malaysia CPI came in at 7.7% year on year vs expecatations of 6.8%
17. UK July Manufacturing business optimism -40 lowest since Oct 2001
18. Germany's Merkel says economic growth slowing, does not see a recession
19. Crude Inventories lower by 1.6M to 295.3M

My Expectation for the USD Crosses

1. EUR : Positive
2. GBP : Positive
3. CAD : Negative
4. JPY : Neutral
5. CHF : Neutral
6. AUD : Negative

Bottomline : Quiet trading day, I will not take any positions. Crude looks like it is cracking a little, as well as the other commodities, which might support equities.

Portfolio Performance : +6.74%

Actions: Did some intraday trading on the EUR/USD

Headline News

1. Dow Futures plummet in after hours this morning on softer earnings from equities
2. Japan May all industries index higher by 0.4% from April
3. Malaysia's former economic czar and two time finance minister Daim said that lack of strong leadership and clear politics have confused both Malaysians and foreign investors.
4. ADB warns Asia moving too slowly to fight inflation
5. Japan supermarket sales lower by 0.9% from a year earlier
6. Italy July consumer confidence 95.8 vs 99.9 in June
7. South Korea oil product exports demand fall to lowest in nearly two years in June, down 6.5% from the previous year
8. Taiwan unemployment rate 3.95% vs 3.84% in May

My expectation for the USD crosses

1. EUR : Midly Negative
2. AUD : Negative
3. GBP : Neutral
4. CAD : Positive
5. JPY : Midly Positive
6. CHF : Midly Positive

Bottomline : I expect the market to be slightly bearish on the US dollar, which means that commodities might be supported. I expect to see bearishness in the equity market dying off.

Portfolio Performance : +5.68%

Actions : Closed my short EUR/USD position, but might continue shorting EUR/USD as the pair heads higher later

Headline News

1. China's Wen says "sense of urgency" needed in managing inflation, growth
2. Major Chinese commercial banks had an average non-performing loan ratio of 6.1% at the end of June
3. Australia Q2 Producer Price Index higher 4.7% year on year vs 5.3% consensus
4. Japanese Prime Minister Yasuo Fukuda is likely to announce a cabinet reshuffle in a bid to reverse his dwindling public support
5. European Commission plans to tighten securitized loan rules
6. Hong Kong June CPI higher 6.1% year on year from 5.7% in May
7. US June leading Index -0.1% vs -0.2% in May

Expectation for the USD crosses

1. AUD : Positive
2. GBP : Positive
3. CAD : Negative
4. JPY : Negative
5. CHF : Positive
6. EUR : Positive

Bottomline : I expect the bull run in the short term to soften, as most of the Bears take the US dollar lower

Portfolio Performance : +5.6%

Actions : Fresh Short EUR/USD

Headline News

1. Swiss Authorities have received a formal request for help from the US IRS in connection with investigations into alleged tax evasion schemes at Swiss Bank UBS
2. Trichet is determined to bring inflation down to under 2%
3. Strong Selling on NZD emerges
4. Moody's downgrade Lehman Brothers to A2, outlook negative
5. NZ CPI jumps 1.6%, fastest pace since 1990
6. Malaysia's manufacturing sales in May rose 14.8% from a year earlier, on higher demand for petroleum and iron and steel products
7. Japan June Department Same Store Sales lower by 7.6% year on year
10. German June PPI higher by 0.9% from May
11. Moody's says that inflation may lead to adverse global inflation
12. Italy May industrial sales lower by 2.7% year on year
13. UK M4 Money Supply higher by 0.2% in June from May
14. Euro Zone May trade deficit 4.6 billion versus 2.5 billion surplus in April
15. India spot sugar gained on strong domestic demand

My expectations for the USD crosses

1. AUD : Neutral
2. GBP : Negative
3. CAD : Positive
4. JPY : Positive
5. CHF : Neutral
6. EUR : Neutral

Bottomline : I feel that the market is getting less bearish, I expect the US dollar to slowly gain in strength.

Portfolio Performance : +2.57%

Actions : Did some intraday trading on the EUR/USD pair

Headline News

1. Italy June oil consumption down 6.1%
2. Spain hopes to issue up to 2.2 billion euros in 10 year bonds
3. ABC Consumer Comfort Index -41 unchanged from previous week
4. Japan's May tetiary index down 0.2% from April
5. Australia's top central banker on Wednesday said it now looked more likely that domestic demand would slow significantly as desired, and there was a good chance inflation could be brought down into its target range over time
6. Philippines June budget surplus at PHP 769 million, which brought the fiscal deficit in 1H 2008 to PHP 18 billion, down from PHP 41 billion deficit in the same period last year
7. German CPI higher by 3.3% year on year
8. European car registrations lower by 7.9% year on year
9. Russia June industry output +0.9% year on year down from +6.7% year on year in May
10. Hong Kong Government announces 11 Billion HKD inflation relief package
11. Dutch May Trade Surplus 2.9 billion Euros, higher by 0.5% year on year
12. UK June Claimant count higher by 15,500, biggest rise since Dec 1992
13. France June Large retail sales flat vs may, higher by 5.3% year on year
14. US June CPI higher by 1.1% vs 0.8% expected
15. US June CPI largest monthly rise since September 2005
16. Foreign investors were net sellers of US securities in May, failing to provide the capital inflows needed to offset the trade deficit
17. US industrial production higher by 0.5% vs no change expected

My expectation for the USD crosses

1. AUD : Positive
2. GBP : Neutral
3. CAD : Neutral
4. JPY : Neutral
5. CHF : Positive
6. EUR : Negative

Bottomline : The market is getting less bearish, probably tired of shorting counters. I expect a quiet market moving forward. Overall, the market still does not like the US dollar very much, but disliking it to a lesser degree

Portfolio Performance : +1.93%

Headline News

1. Iran top nuclear negotiator and EU foreign policy chief will discuss a "timetable" for future negatiations to break the deadlock in the atomic crisis
2. RBA Minutes shows central bank's stance on inflation
3. RBA says that monetary policy cooling demand
4. Bank of Japan sees higher inflation, slower growth
5. Singapore May retail sales higher by 4.8% year on year versus forecast of 6.5%
6. BOJ leaves rates unchanged
7. French May current account surplus 2.5 billion versus 3 billion Euros
8. Philippines overseas workers remittances higher by 15.6% in May
9. Thai PM offers tax cuts, handouts to spur economy
10. Dutch May retail sales higher by 7.8% year on year
11. UK June CPI higher by 3.8% from a year ago vs 3.6% consensus
12. German ZEW Economic expectations index -63.9 vs -52.4 in June
13. US June Core inflation matches May, fastest annual gain since 1991
14. US Fed Empire State Manufacturing -4.92 vs -8.68 in June, better than expected
15. US inventory to sales ratio at record low of 1.24

My expectation for the USD crosses

1. AUD : Positive
2. GBP : Negative
3. CAD : Neutral
4. JPY : Negative
5. CHF : Negative
6. EUR : Neutral

Bottomline : The market has got carried away with equity shorts, I still think that the market will continue not to like the US dollar

Portfolio Performance : +1.92%

Expectations for the USD Crosses

1. AUD : Positive
2. GBP : Neutral
3. CAD : Positive
4. JPY : Neutral
5. CHF : Positive
6. EUR : Neutral

Bottomline : I think that the market turmoil will continue.

Portfolio Performance : +1.91%

Actions : I have closed my GBP/USD trade after the USD weakened on a volatile equity market

Headline News

1. OPEC cuts world oil demand forecast, cites energy efficiency
2. China 1H actual Foreign Direct investment higher by 45.5% year on year
3. Malaysia May Industrial Output 2.5% versus 3.4% expected
4. Japan revised May industrial output higher by 2.8% versus 2.9% rise
5. Japan consumer confidence index at 32.6 in June from 33.9 in May
6. German June wholesale price index higher by 0.9% from May, higher by 8.9% year on year
7. Russian central bank raises interest rates by 25 basis points to 11.00%
8. OECD May Composite Leading indicator 97.2 vs 97.7 in April
9. OPEC cartel said that it might need to slow investment in its oilfield as consuming countries reduce their oil demand through conservation and increasingly turning to alternatives such as biofuels
10. US May trade deficit narrows to 59.8 Billion USD vs 62.1 Billion USD expected
11. US June non oil import prices higher by 78.6% over year, the largest increase in 5 years
12. Michigan consumer sentiment in July rose to 56.6 versus 56 expected

My expectation for the USD crosses

1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Neutral
5. CHF : Positive
6. EUR : Positive

Bottomline : Equity market volatility have contributed to a weaker US dollar, the market seems to be a bit tired of short selling stocks for the moment. I expect the market to quieten down for a while before we start another round of financial maket turmoil.

Portfolio Performance : -2.39%

Headline News

1. India's Ministry of Agriculture siad that the country's total food grain production for fiscal 2007-2008 has reached 230.67 million tonnes. Wheat production is expected to rise 3.42% year on year and rice production by 3.3%
2. Japan's June corporate goods price index higher by 5.6% year on year
3. Japan's May current account surplus -5.9% year on year
4. Singapore GDP higher by 1.9% year on year, which was below forecast (this is going to be splashed on the front page on the media tomorrow)
5. Australia June unemployment rate 4.2% versus 4.3% consensus
6. China 1H soybean imports higher by 24.4% year on year
7. China 1H oil product imports higher by 16.4% year on year
8. France May industrial output lower by 2.6% vs April
9. Dutch May industrial sales higher by 6% year on year
10. June Halifax house prices lower by 6.1% year on year (I think traders are going to sell the GBP on this)
11. Realtytrac said that US foreclosures are lower by 3% from May in June, but higher by 53% year on year
12. Bank of England leaves rates on hold at 5%
13. US jobless claims lower by 58 000 to 346 000, but continuing claims rose 91 000 to 3.202M
14. A defence analyst said that Iran had doctored photographs of missile firing and exaggerated the capabilities of the weapons


Expectation for the USD crosses

1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Positive
5. CHF : Neutral
6. EUR : Neutral

Bottomline : I am still keeping the Long GBP/USD position. I expect the equity market to soften further and the US dollar to continue to weaken

Portfolio Performance : -1.95%

Headline News

1. Fed's Lacker sees positive growth in 08, warns of unacceptable high inflation
2. Russia threatens to react with military force against US missile shield
3. American consumer credit rise $7.78 billion, mostly the use of credit cards
4. US ABC consumer confidence -41 from -43 in the previous week
5. Japan's May core private sector machinery orders higher by 10.4% from April
6. Australia consumer confidence hits 16 year low in July
7. Malaysia says that CPI may exceed 6%
8. Iran Test fires nine missiles
9. German current account surplus 7.5 billion euros vs 15.5 billion in April
10. The European Union agreed in principle yesterday to publish weekly oil stock data, in what ministers described as an attempt to inject more transparency to a market where prices are regularly reaching new highs.
11. Trichet says that Euro zone growth moderate but ongoing
12. US crude oil stocks fell to 293.9M barrels
13. Gasoline stocks gained 0.9M to 211.8M

My expectation for the USD crosses

1. AUD : Neutral
2. GBP : Positive
3. CAD : Positive
4. JPY : Negative
5. CHF : Neutral
6. EUR : Negative

Bottomline : I am still holding on to the long GBP/USD trade. The US dollar is weakening, but I think the market is still looking for a direction

Portfolio Performance : -5.16%

Headline News

1. Bank Sector Tracker hit all time low as credit concerns continue
2. The British government said on Monday that it would slow the expansion of biofuels following a report, which they said could increase greehouse gases and food prices
3. Japan June Bank Lending higher by 2% year on year
4. Singapore Sembcorp Marine wins $565 million Rig Order
5. Monster Index for Europe came in flat - jobless stable in Europe
6. Number of Japanese coporate bankruptcies rose 7.1% in June from May
7. Philippines increases transport fares as fuel costs soar
8. UK value of home loans down 44% from a year ago
9. UK May House prices higher by 3.7% year on year from 4.9% growth in April
10. Leading German think tank said that the European construction sector is headed for a sharp slowdown
11. US May Wholesale inventories higher by 0.8% vs 0.7% expected
12. US May pending home sales index fall 4.7% to 84.7 vs 86.4 expected

Expectation for the USD crosses

1. AUD : Neutral
2. GBP : Neutral
3. CAD : Negative
4. JPY : Negative
5. CHF : Neutral
6. EUR : Negative

Bottomline : The equity market is set to rally, which builds the case for a stronger USD. Commodities might be pressure in the short term but I will read too much into a selloff yet. I am still holding on to my long GBP /USD trade

Portfolio Performance : -0.6%

Headline News

1. Fed's Miskin said that high commodity prices could take a toll on the economy
2. Spanish PM sees "serious difficulties for economy, no recession"
3. Bosnian national airline seeks strategic investors
4. The UK Times reported that "shock" figures from Marks and Spencer that sales have fallen by 5% in the past three months has fueled fears that the consumer slump will develop into a "severe consumer slump"
5. Swiss consumer price index +2.9% versus June forecast of 3.1%
6. Paulson says that biggest focus is economic downturn
7. Spain June services index is lowest recorded for any Euro Zone PM (this is serious)
8. Spain Service PMI in June is lowest in 9 year history
9. Dutch Q1 revised GDP higher by 3.3%
10. French June PMI at 50.1 lowest since 2003
11. Euro Zone Service PMI for June revised lower to 49.1 from 49.5
12. Hong Kong Retail Sales higher by 12.9% YoY
13.UK CIPS June Services PMI 47.1, lowest since Oct 2001
14. BOE survey shows that credit terms worsened for both households and corporates in Q2
15. Euro Zone Retail sales higher by 1.2% ver April in May, higher by 2% YoY
16. US nonfarm payroll -62000 vs -60000 expected in June


Bottomline : I am still long on the GBP, the ECB hike interest rates to 4.25%, but Trichet was more dovish than expected.

Portfolio Performance : +14.17%

Actions : I bought GBP at 1.9922

Headline News

1. Denmark in recession after first quarter contraction
2. China questions Australia on Investment Curbs
3. The Reserve bank of Australia index of commodity prices jumped 7.9 percent in June on a huge increase in coal and ore prices
4. Japan monetary base higher by 0.4% from a year earlier
5. China May consumer confidence rises to 94.3 vs 94 in April
6. Indonesia fuel subsidy expected to exceed $21.7 billion if oil averages $140 this year
7. Philippine Central Bank sees inflation peaking in Q3, softening in 09
8. Spain jobless rises by 37 000 vs 15 000 in May
9. Germany new machinery plant orders down 12 percent year on year
10. UK June construction PMI 38.8 vs 43.9 in May
11. Euro Zone May PPI higher by 1.2 percent, higher by 7.1% year on year
12. OECD says that unemployment starting to rise as growth slows
13. US Challenger June Layoff intentions 81 755 vs May 103 522
14. Singapore PMI reverted to growth with orders from the domestic market rising
15. US May Factory Orders higher by 0.6% - highest level on record

My expectations for the USD crosses

1. AUD : Neutral
2. GBP : Positive
3. CAD : Positive
4. JPY : Positive
5. CHF : Positive
6. EUR : Positive

Bottomline : Market volatility has picked up, I expect the USD to depreciate and bought the GBP

Portfolio Performance : + 13.98

Actions : The CAD trade helped the performance of the portfolio, the trade closed at the profit target of 31 PIPs

Headline News

1. Paulson is on a five day trip through Europe, working with European leaders and Russian leaders on how policy makers need to re think on how to deal with failed firms. (I have to admire this guy, he really has fire in his belly and is very persistant at getting deals done. Great spirit from an ex IB)
2. Morgan Stanley Places Lehman Brothers at Overweight
3. Bank of Korea says that GDP will grow by 4.6% in 2008
4. Bank of Korea says that CPI will rise by 4.8% in 2008
5. Manufacturing activity in Australia continued to slow in June as production and new orders felt the impact of higher interest rates and easing global conditions
6. Japan Tankan declined but better than expected
7. China Manufacturing PMI 52 vs 53.3
8. New Home Sales fall 5% in May
9. Singapore Q2 private residential prices higher by 0.4 percent from Q1
10. RBA leaves interest rate unchanged at 7.25%
11. Japan June new vehicle sales lower by 3.6% from a year earlier
12. Ducth PMI 51.1 vs 51.5 in May
13. German May retail sales higher by 1.3% from April
14. UK House prices lower by 0.9% in June from May
15. Indonesia June CPI higher by 2.46% from May, higher by 11.03% year on year
16. Indonesia May exports higher by 17.5% from April
17. German adjusted jobless lower by 38 000 from May
18. Euro Zone May unemployment 7.2% unchanged from April
19. US June ISM Manufacturing index rise to 50.2 vs 48.7 expected

My Expectations for the USD Crosses

1. AUD : Neutral
2. GBP : Positive
3. CAD : Negative
4. JPY : Positive
5. CHF : Neutral
6. EUR : Positive

Bottomline : I think the market is getting a bit tired of selling the USD, I expect the market to pause and volatility to decrease

Portfolio Performance : +5.75%

Actions : Long USD/CAD at 1.01845

Headline News

1. Germany sees 2009 federal budget deficit 10.5 billion euros vs 11.9 billion in 2008
2. Israel approves prisoner swap with Hezbollah, reopens crossing for goods to Gaza
3. WSJ highlighes Taiwan as investment opportunity
4. Japanese PM Fukuda approval rating higher by 2 points to 26 percent
5. Domestic exporters buying AUD/USD
6. Indonesian President Susilo Bambang Yudhoyono popularity ratings have fallen because of the recent fuel price increase
7. Singapore May commercial bank loans S$256.91 billion vs S$203.80 billion
8. Singapore M3 S$323.81 billion versus S$296.95 billion a year ago
9. Malaysia may tweak its budget deficit for 2008
10. South Korea industrial production down 0.6 percent from April
11. Japan May housing starts lower by 6.5% from a year earlier
12. Japan May orders received by 50 largest contractors down 25.2% year on year
13. German May wholesale down by 0.8% year on year
14. FT says that cracks are appearing in Chinese discretionary spending
15. UK May mortgage approvals hit new record low of 42 000 vs April 58 000, lowest since March 2001
16. Euro Zone Provisional HICP higher by 4.0% versus 3.7% in May
17. Philippines sees inflation above 11% in June
18. Malaysia Broad Money supply higher by 12.4% year on year
19. Thai Inflation could top 10% in July
20. Chicago Purchasing index 49.6 versus 49.1 in May


My expectation for the USD crosses

1. AUD : Negative
2. GBP : Positive
3. CAD : Negative
4. JPY : Positive
5. CHF : Positive
6. EUR : Positive

Bottomline : I think that the overall environment is still nervous and a lot of people are not optimistic over the USD, I am long CAD at this point

Portfolio Performance : +5.73%

Actions performed : I did some intraday trades, trading the GBP/USD pair

Headline News

1. The FOMC statement was very discouraging for the USD bulls
2. UK Prime Minister Gordon Brown says that law reform needed to get nuclear stations to be built quickly to reduce the country's dependance on oil and to combat climate change
3. Foreign investors were net buyers of Japanese stocks for the sixth straight week
4. The Taiwan Ministry of Economic Affairs plans to propose a rise in the cap of Taiwanese corporates in China by the end of July
5. Singapore May factory output down by 12.8% versus average forecast growth of 1.6%
6. German import prices higher by 2.4% year on year in April
7. French June consumer confidence -45 versus -41 in May
8. Foreign investors net sellers of 4.02 billion Taiwan shares
9. Germany might introduce a EUR 5 billion tax break for commuters to shield consumers from rising petrol prices.
10. OPEC believes that it will need to produce far less oil over the next 12 years than the US has suggested, saying that new supply from regions and biofuels would reduce the need for its oil
11. Dutch consumer confidence falls to -19 from -17 in May
12. Euro Zone May M3 higher by 10.5%, unchanged from April
13. Euro May Loans higher by 10.4% versus 10.6 percent in April
14. Hong Kong Exports higher by 10.3% year on year versus 14.5% in April
15. Taiwan Central Bank will do it can to fight inflation
16. OPEC President sees $150 - $170 per barrel oil in summer
17. US jobless claims unchanged from previous week
18. US Q1 GDP Final came in at 1% as expected
19. US Conference Board Help Wanted Ad index 17 versus 18 in April
20. US May existing homes sales higher by 2% Month on Month

My expectation for the USD cross

1. CAD : Negative
2. JPY : Positive
3. CHF : Positive
4. EUR : Negative
5. AUD : Neutral
6. GBP : Neutral

Bottomline : I expect market volatility to continue, and that the USD might succumb to further weakness

Portfolio Performance : +5.15%

Headline News

1. US Paulson does not see evidence speculators driving oil price
2. Paulson says that oil price rise is mostly a result of supply and demand
3. Paulson says that there is room for improvement in the regulation of the energy futures market
4. Japan May Corporate Price Service Index higher by 0.6% YoY
5. Japan May Trade Surplus 365.61 billion Yen vs 395.55 Billion Yen from a year earlier
6. Financial Times says that Australian resources in demand as never before
7. Taiwan would talk with China on direct shipping and oil exploration in the second half of this year
8. China Q2 banking prosperity index falls to 68.3 percent versus 69.7 percent in Q1
9. South Korean authorities sold as much as $1 USD to boost the KRW, the intervention helped supported the WON, but the currency remains among the five Asian currencies that have fallen by 7 percent or more against the USD
10. Trichet sees inflation remaining high for longer than previously thought
11. Trichet says that ECB is in state of heightened alertness
12. Euro Zone industrial orders were higher by 11.7 percent year on year
13. UK July retail sales expectations fall to -7 percent versus +6 in June
14. Trichet says that commodity prices are driven more by demand than supply
15. The Thai government says that the economy is set to grow 5.6% this year
16. US Durable Goods unchanged in May (no surprises here)
17. Saudi arrests 700 Islamists preparing "oil attacks"
18. US May New Home Sales lower by 2.5 percent to 512 000 versus 515 000 expected
19. Spainish housing slowdown to end in second half of 2009

My expectation for the USD crosses

1. AUD : Positive
2. GBP : Negative
3. CAD : Neutral
4. JPY : Positive
5. CHF : Negative
6. EUR : Positive

Bottomline : I think the market is against the USD, but I am not going to place my bets just yet, I will wait for Bernanke to signal his decision later first

Portfolio Performance : 5.15%

Headline News

1. Treasury official says housing correction is currently "in progress"
2. Treasury official says that financial conditions would improve, but not in straight line
3. Think Tank says Ireland heading for recession for the 1st time in 25 years
4. A PBOC survey says that chinese firms expect the CNY to appreciate by 3% in 6 months
5. Germany's GFK sees consumer climate index at 3.9 points vs 4.7 in June
6. French household consumption higher by 2% from April
7. French June business climate indicator 102 vs 102 in May
8. Global inflation fears steepened as Chinese steelmakers agreed to record increase in annual ore prices, which would boost the cost of cars and other machinery products
9. BHP Billiton increases Western Australia iron ore reserve by 23 percent
10. Taiwan May export orders higher by 14.46 percent on year from 15.69% in April
11. UK Mortgage approvals slump to 27 968, the lowest in a decade, says BBA
12. Spain Jan-May budget surplus 2.722 billion Euros versus 14.36 billion Euros surplus 2007
13. Russia GDP higher by 7.7% year on year
14. Thailand and US to resume free trade talks
15. US April S&P Case Shiller Home price index falls 15.3% year on year
16. US Fed Manufacturing index -12 versus -3 in May

My epextation for the USD crosses

1. AUD : Positive
2. GBP : Negative
3. CAD : Neutral
4. JPY : Positive
5. CHF : Negative
6. EUR : Positive

Bottomline : I expect volatility to continue, I expect the market to probably set the tone after the Fed meeting which ends tommorrow

Portfolio Performance : 5.14%

Headline News

1. Saudi Arabia's Al Naimi says world oil supplies are enough for decades
2. PBOC Governor Zhou has signalled tougher action in the fight against inflation
3. UK property website Rightmove said that the asking price of a UK home was nearly 3000 pounds lower in June compared to May
4. Japan Large Firms Q2 business conditions index -15.2 versus -9.3 in Q1
5. Japan companies FY CAPEX seen down 0.9% versus down 9.4% in March
6. The Australian Bureau of Statistics said that motor sales were 2.6% higher from a year ago but fell 1.6% from May
7. Singapore CPI higher by 7.5% year on year, consensus looking at 7.9% year on year
8. French June provisional Services PMI 49.2 versus 50.5 in May
9. German June provisional Services PMI 52.3, consensus looking for 53.2
10. Taiwan May unemployment 3.84% versus 3.81% in April
11. German IFO June Business climate index 101.3 versus 103.5 in May
12. Euro Zone June Composite PMI 49.5 versus 51.1 in May

My expectation for the USD crosses

1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Positive
5. CHF : Negative
6. EUR : Positive

Bottomline : The market is preparing for the US rate decision, where most participants expect a hold at 200 basis points. I think we might see some volatility in the crosses after the announcement on Wednesday

Portfolio Performance : +5.13%

Headline News

1. US Paulson says that energy prices prolonging hard times
2. Newspaper stocks fall after Goldman downgrade
3. Moody's said that the 3 leading Singapore banks should still see growth this year, but might struggle to show growth next year as bad loans start to rise.
4. Malaysia's manufacturing sales in April rose 18.5% from a year earlier led by refined petroleum products, electronics, iron and steel products and chemicals
5. Vietnam said that it would export more rice after it has ensured that domestic market is well supplied first
6. Swiss producer and import prices in March were higher by 3.9% year on year
7. Dutch April consumer spending rises 2.1% year on year
8. Italy April industrial sales higher by 13.9% year on year, orders higher by 12.8%
9.Hong Kong CPI higher by 5.7% in May vs 5.4% in April
10. India inflation rate accelerated to a 13 year high on a recent fuel hike in retail fuel prices and because of an increase in prices of non food items. The WPI rose 11.05% for the week ended June 7
11. Thousands of Thai protestors breached a police barricade and surrounded the government office on Friday
12. Rumors filled the market of European banks in trouble, a US broker to report earnings downgrade, which caused a negative USD and spreads to widen
13. IMF says that US recovery will be more gradual than previous recessions

My expectation for the USD crosses

1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Positive
5. CHF : Negative
6. EUR : Neutral

Bottomline : The US dollar might be under some pressure on financial market turmoil

Portfolio Performance : +5.12%

Actions Performed : I closed my USD/CHF trade, which helped the performance of the portfolio

Headline News

1. London's Business leaders have become pessimistic about the capital's competitiveness and their firm's future prospects fue to poorly handled reforms by the Treasury and the economic downturn
2. China agrees to ease rules for insurance companies and foreign investors in China's securities market as part of this week's meeting of the US-China Strategic Economic Dialogue
3. Japan's All industry index higher by 0.8 percent from March
4. Gains in the service sector offset weak industrial output
5. Markets anticipating an interest rate raise at upcoming Taiwan Central Bank meeting
6. The People's Bank of China sold three year bank bills in open market
7. World Bank says that China's money supply is under control and inflation is stable
8. Singapore releases 13 new land sites for sale in the second half of this year
9. Swiss May Trade Balance widens to 1.87 Billion Francs
10. Thailand's PM under attack from all sides
11. CHF weakens as SNB sounds relaxed
12. Dutch unemployment at 4.1 percent vs 4.7% from a year ago
13. British May retail Sales came in at 8.1% year on year, higher than expected
14. Maalysia said that it would go ahead with two major infrastructure projects despite its plan to review some projects under the state development blueprint
15. Shell shuts down 200 000 barrels of production at Nigerian oil field
16. US jobless claims falls 5000 to 381 000, continuing claims fall 76 000
17. China will raise petrol and diesel prices from Friday, the average electricity price will rise 2.5% from July 1
18. US Philly Fed Employment Index -6.9 versus -1 in May
19. S&P said that Vietname may experience sharp correction in economic growth

My expectations for the FX USD crosses

1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Positive
5. CHF : Negative
6. EUR : Neutral

Bottomline : I think we will continue to see volatility in the market

Portfolio Performance : +4.09%

Headline News

1. Goldman Sachs analyst said that credit card losses would continue to deteriorate till 2009, banks with exposure to the securities are Citigroup, Bank of America and JP Morgan and Chase
2. Chinese officials said that price controls in market will continue
3. The Philippines recorded a net outflow of $158.1 million in foreign portfolio investments in May as investors fret over consumer prices and external factor effects on the economy
4. Japan's April Coincident index 101.7 unchanged from initial estimate
5. Japan May Department Sales down 2.7% year on year
6. Czech Retail Sales higher by 4.6% versus 5.6% expectations
7. Bank of England kept rates unchanged
8. Opposition lodge a vote of no confidence against Thai prime minister
9. According to Merrill Lynch, most fund managers are most underweight equities in a decade
10. The National Assciation of Realtors said that the credit crunch is beginning to cause significant damage to the commercial real estate business

My expectations for the FX crosses against USD

1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Neutral
5. CHF : Negative
6. EUR : Positive

Bottomline: I am still into my USD / CHF long trade, I continue to expect volatility in the market

Portfolio Performance : +4.02%

Headline News

1. US NAHB Housing Index falls to 18 vs expectations of 20 (shows that US housing is still in a mess)
2. Japan's Tetiary Index higher by 1.8 percent in April from March
3. Indonesian actual investments in the first five months surged to 80.9 percent to 93.9 trillion rupiah from 51.9 trillion a year ago
4. Australian Central Bank saw current monetary policy as adequate
5. Philippines unemployment rate edged to 8% from 7.4% in April from a year ago
6. Singapore Non Oil Domestic Exports Fall 10.5% year on year as pharmaceutical shipments fall. Pharmaceuticals actually fell 48.5% year on year! (This is sure to hit the press tomorrow)
7. Hong Kong March-May unemployment rate at 3.3 percent unchanged from Feb- April
8. UK annual May CPI rises to 3.3% from 3% in April
9. Euro Zone April Trade Surplus 2.3 billion Euros vs 1.5B deficit in March
10. Germany June Economic expectations -52.4 versus -41.4 in April
11. US wholesale inflation up 1.4% in May while core inflation was higher by 0.2%
12. US builders slowed construction on new homes in May in an effort to reduce inventory. Housing starts fell 3.3% to 975 000 unit rate, the lowest since 1991


My Expectations for the USD Crosses

1. AUD : Neutral
2. GBP : Neutral
3. CAD : Positive
4. JPY : Neutral
5. CHF : Negative
6. EUR : Neutral

End of the Day: I am still keeping my Long USD/CHF trade, I think we might face some volatility, so we will see how things move along

Portfolio Performance : +3.99%

Actions : Went long USD/CHF as I expect US dollar to retain its strength

Headline News

1. China will ease price controls on oil and gas products "at an appropriate time" China is capping domestic oil, gas and power prices denying energy companies the option to pass the cost to consumers, which has caused price levels to inflate

2. China May Industrial Output higher by 16% from a year earlier

3. Singapore Q1 unemployment rate was 2% vs 1.7% in Q4

4. China Jan - May fixed asset investment rose 25.6% from a year earlier

5. Tokyo condominium sales down 17.7% year on year

6. Philippines recorded $42 million surplus BOP on remittance from overseas Filipinos

7. NZD under pressure as talk of a possible recession coming for the economy

8. Russia Q1 GDP was 8.5% higher YoY

9. Euro May HICP wsa 3.7%, above expectations

10. US Empire State Manufacturing Index for June was -8.93 vs -3.23 in May

Expectation for the FX Crosses Against the USD

1. AUD : Neutral

2. GBP : Neutral

3. CAD : Neutral

4. YEN : Negative, Yen depreciation on US dollar bullish sentiment

5. CHF : Negative, Long USD/CHF at 1.04289

6. EUR : Negative

Portfolio Performance : +3.99%

Actions: I exited my long on the GBP against the USD in a day, which helped the performance of the portfolio

Headline News

1. Japan Revised Q1 GDP up 1% versus 0.8% initial estimate
2. Japan Q1 non residential investment + 0.2% vs -0.9%
3. Australian consumer sentiment index falls to 15 year low
4. China May PPI higher by 9.2% YoY
5. Australia says that free trade agreement with China will resume soon
6. Two truck drivers were killed in Spain and portugal as they protest against high fuel costs (Now, this is serious. I mean, we are seeing people dying because of high commodity prices... It really brings to question the ethics of investing into commodities. No doubt it is an effective hedge against inflation, but think about the serious consequence for those who do not have the access to the financial instrument. Those of you who are long on crude, You have blood on your hands)
7. China May January - May Crude Imports higher by 12.7% YoY, Soybean Imports higher by 20.4% YoY
8. France CPI higher by 3.4% YoY
9. UK jobless higher by 9000 in May
10. Speculation of M&A for Aussie companies keeping AUD afloat

Expectations for the FX crosses

1. AUD : I am Neutral
2. GBP : Turning Negative, the Claimant number is getting higher
3. CAD : I am Negative
4. YEN : I am Negative
5. CHF : Positive
6. EUR : Neutral

End of the Day : Fed Hawkish talk still lingers in the market, which might lend support for the USD

(It has been a long time since I blogged, I will starting to blog to keep track of my views of the market as well as to track my current expectations of the forex pairs)

Portfolio Performance : 0%

Headline news today

1. Bank of Canada holds rates at 3%
2. US Fed insisting inflationary views, lends support to USD
3. Lots of focus on oil today, world protests high commodity prices
4. Gold sell off on pressure from oil and USD
5. Regulators focusing on easing commodity prices in the long term, coming up with solutions to solve food and oil crisis

My expectations for the following pairs against the USD

1. AUD - neutral, I expect it to be range bound
2. GBP - positive, bought at 1.9535
3. CAD - negative, I will wait and see
4. YEN - shaky on USD pressure, the pair might rally
5. CHF - weak on USD pressure
6. EUR - neutral, but might succumb to USD pressure

End of the Day: I think the USD is pressuring the pairs on Fed Talk, Bond and Gold Sell Off.

Fund Performance (incetion date : 4 Dec 06) : 0.66971% per day

5th Mar 07

EUR (Neutral) - Price inflation levels will be lower than what the European Central Bank deems as excessive. National European governments have started to worry that a tight monetary policy might stop economic recovery in the single-currency bloc. The ECB is set to lower its inflation forecast to about 1.8 per cent or 1.9 per cent, reflecting the recent decline in oil prices.

Later

0830h - AUD : Trade Balance / Building Approvals

1445h - CHF : GDP

1800h - EUR : Euro Zone Retail Sales

2200h - CAD : Rate Decision

Fund Performance per day (inception date : 4 Dec 06) : 0.97575%

5 Feb 07

EUR (Losing Strength) - When the finance ministers from the G7 meet in Germany next weekend, European policy makers have said they will push for a discussion about Japan's low currency, the yen's low value gives Japanese exporters an unfair edge against competitors that have to pay for their costs in euros. Traders will focus on the Rate Decision and Trichet on Thursday, and sentiment has it that the BOE is less likely to raise rates in the short term, a rate hike is more likely in March.

GBP (Losing Strength) - Only five of the 62 economists surveyed by Reuters in recent days think the Bank's monetary policy committee will stage a back-to-back rise at the end of its two-day meeting on Thursday. The uncertainty revolves around whether last month's increase merely brought forward an expected February rate rise - or whether the MPC's view of inflation risk has changed to the point where it felt additional tightening was required. Although recent mortgage lending data suggest that the 0.75 percentage point rise in interest rates since last August may be starting to have an impact, most of the recent economic data have been strong, in terms of pay settlements and signs of companies pushing through higher prices.

Later

2300h - USD : Non Manufacturing Index

2300h - CAD : Ivey Purchasing Managers Index

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.

Fund Performance per day (inception date: 4 Dec 06) : 1.09553%

Today

EUR - (Bullish) There has been an explosion of construction activity." The industry's emergence from a decade-long recession propelled Europe's largest economy to its fastest expansion in five years in the second quarter. Even as property booms are at or near their end in the United States and Britain, Germany is gaining momentum, promising a spur to growth for the foreseeable future. The economy's 0.9 percent second- quarter growth was driven by a 4.6 percent jump in construction activity, the biggest increase in a decade, the Federal Statistics Office said last week. Despite the gains, builders are warning against any hype. "I wouldn't talk about a construction boom yet," said Peter Keitel, chief executive of Hochtief, which is based in Essen and is the largest German builder. "But after 10 years of decline, the market is improving. If this continues, construction can reclaim its traditional role as the motor of the German economy." Hochtief is a commercial lead manager on the Frankfurt 'Hochvier' project, which will cost $1 billion. In further good news for the industry, economic growth is forecast to exceed 2 percent this year, the most since 2000 and up from 1 percent in 2005, Axel Weber, the Bundesbank president, said in a newspaper interview published last week

USD - (Neutral) Improvement in consumer sentiment, signs that manufacturing activity is picking up and more evidence that a slowdown in the housing sector is coming to an end, is providing support for the dollar as traders bet that the Federal Reserve Board will not be in a hurry to cut US interest rates next year.

AUD / NZD (Bullish) - The outlook for the Australian dollar into 2007 looks solid as global economic growth is likely to remain above historical levels which will benefit heavily commodity weighted economies such as Australia due to continued high levels of demand for raw materials.
NZD is garnering support from expectations of a further rate hike next month to rein in household expenditure even though the central bank's official cash rate at 7.25 pct is the highest in the industrialized world.

Later

2300h : USD : Help wanted index

Fund Performance per day (inception date : 4 Dec 06) : 1.38321%

Friday (22 Dec 06)

USD (Neutral) The economy continued to lose momentum in the third quarter, expanding at a weaker-than-expected 2% inflation-adjusted annual rate, and many signs suggest it will stay in a lukewarm zone in the months ahead. Economists expect decent gains in consumer spending to offset further weakness in the housing and vehicle sectors. Slow economic growth is likely to continue in the near term.

Today

JPY (Neutral) - Lower unemployment last month, only a small drop in household spending and inflation in line with expectations mean that the Bank of Japan could still raise interest rates next month, said Norio Miyagawa, an economist at Shinko Research Institute.

Later

AUS, NZ, Europe Markets are closed today

27 Dec 06, 1300h - JPY : Housing Starts

Technicals

Target USD/JPY 119.80, downside risk at 117.50

Fund Performance per day (inception date: 4 Dec 06) : 1.3518%

Yesterday

Market sees EUR/JPY and USD/JPY as overvalued.

JPY - (Neutral) The unexpectedly large increase in Japan's trade surplus last month confirmed that exports remain strong, showing US consumer spending is still resilient despite the weakness in the housing market there, NLI Research Institute senior economist Taro Saito said. 'We had earlier thought that exports would start slowing down, but despite the collapse of the
housing market, US consumer spending has been relatively solid, thereby supporting exports from Japan, automobiles in particular,' Saito said. 'Having said so, exports, by volume, are destined to slow down in line with the slowdown of the US economy,' he added.

EUR (Bullish) - Jean-Claude Trichet, said that the economy of the 12-country euro zone remained at risk of accelerating inflation, signaling that he will probably endorse interest rate increases next year. "Inflation rates are likely to increase again in early 2007," Trichet told the European Parliament's economic committee in Brussels. In his review of the economy, Trichet said that recent data confirmed the ECB's view that the economic expansion was broadening. Liquidity is "ample," consumer spending should strengthen and money supply growth is accelerating, he said. "The conditions remain in place for the euro-area economy to grow solidly," Trichet said.

NZD (Slight Bullish) - New Zealand’s economy expanded in the third quarter, with GDP up 0.3% on Q2 2006. Inflation Risks remains an objective and RBNZ is expected to keep rates on hold.

Later

1300h - JPY : Minutes of Nov 15 Meeting / Supermarket Sales

1500h to 1600h - EUR : German Import Prices / French Business Confidence Indicator / French GDP / French Consumer Spending

1700h - EUR : EuroZone Current Account

1730h - GBP : Index of Services

1800h - EUR : Industrial New Orders

2130h - USD : Personal Income / PCE / Durable Goods

Technicals

Target EUR/JPY to reach 156.90.

Target USD/JPY to reach 119.80. Risk to the upside is 117.50

Fund Performance per day (inception date: 4 Dec 06) : 1.27542%

Yesterday

USD (Neutral) - Mortgage applications came in lower last night but the market is looking for more USD data to factor in the possibility of a rate cut early next quarter. Overall last night, the dollar rose against other major currencies after the government reported that November wholesale inflation increased more than expected and ahead of two key economic reports on Thursday. Last week's jobless claims data showed a surprisingly sharp drop in filed claims following an even larger decline the previous week. The declines supported the view that employers are anticipating an economic rebound next year despite the slowdown this year.
The Federal Reserve has kept rates unchanged at 5.25 percent since August, following a more than two-year string of hikes.

Later

2130h - CAD : GDP / Retail Sales / Retail Sales less Autos

2130h - USD : Initial Jobless Claims / annualised GDP / Leading Indicators

0100h - USD : Philadelphia Fed Survey

Fund Performance per day (inception date : 4 Dec 06) : 1.48817%

Yesterday

OIL (Bullish) - Crude is finding support at the 60 USD/barrel level and there is limited downside. Middle Eastern countries are confident that the oil price surge will continue and they will continue to spend, investing in oil-consuming countries, offseting global trade imbalances.

USD (Neutral) - The broadest measure of the nation's trade deficit increased in third quarter, with the lack in payments on foreign debt and investments increasing to a potentially worrisome high. The U.S., for the fourth consecutive quarter, also paid out more to foreign creditors and investors than it received from its own investments abroad. The investment deficit rose to a record $3.78 billion in the third quarter, up $1.63 billion from the second quarter, the Commerce Department said.

NOK (Bullish) - Statoil will buy the oil and natural gas operations of Norsk Hydro in an estimated $28 billion deal that creates the largest offshore operator in the world and a new national energy champion for Norway. The country now holds about half of Europe's remaining oil and natural gas reserves. It is the world's third-largest oil exporter after Saudi Arabia and Russia. The expanded Statoil's estimated 6.3 billion barrels in oil and natural gas reserves would be just a small fraction of Saudi Arabia's national oil company, Saudi Aramco, or Russia's gas company, Gazprom, but the company's exports are strategically important to Western Europe.

Today

USD (slight Bearish) - The dollar fell against other major currencies Tuesday, driven by technical rather than fundamental factors in a day of thinner trading before the holidays. Despite a stronger than expected PPI data, the greeback lost against the majors.
The Labor Department reported Tuesday that its Producer Price Index, a measure of wholesale inflation, jumped 2 percent in November, the biggest advance since a similar increase in November 1974. The gain was four times larger than the 0.5 percent increase economists had forecast.

EUR (Bullish) - The closely watched Ifo index of business confidence in Germany showed an unexpected improvement for December, underlining the strength of the upturn in Europe's biggest economy.

Later

1615h - CHF : Producer and Import Prices

1730h - GBP : BoE Minutes / Business Investment / M4 Money Supply / Banks Lending

2000h - USD : Mortgage Applications

2130h - CAD : Wholesale Sales

Fund Performance per day (inception date : 4 Dec 06) : 1.37987%

Friday

OIL - (Bullish) The Organisation of the Petroleum Exporting Countries cut productions early next year despite a tightening world crude market. Opec ministers met in Abuja and agreed to cut output by 500,000 barrels a day from February 1. Analysts saw the move as highlighting Saudi Arabia's increasing assertiveness within the cartel, which comes as Riyadh is also stepping up its political activity in the Middle East, even at the risk of angering the US, its major western ally.

EUR - (Bullish) More than half a million people found jobs in the euro zone in the third quarter, and annual wage growth slowed to 2.2%, according to the European Union's statistics office Eurostat. The European Central Bank will closely monitor wage growth as higher consumer purchasing power can trigger inflation, which the bank wants to keep just below 2% annually. The ECB has said a risk to its inflation outlook, which predicts price growth slowing to 2% next year from 2.1% this year, was that wages could grow more than expected because of rising employment and fast economic growth.

Yesterday

USD - (Bulls losing strength) America's deficit in the broadest measure of trade shot up to an all-time high in the summer, reflecting the huge jump in the country's foreign oil bill.
The Commerce Department reported Monday that the current account trade deficit increased 3.9 percent to a record $225.6 billion in the July-September quarter. That represented 6.8 percent of the country's total economy, up from 6.6 percent of the gross domestic product in the spring quarter. The current account is the broadest measure of U.S. trade because it tracks not only the flow of goods and services across borders but also investment flows. The figure is closely watched by economists because it represents the amount of money the country must borrow from foreigners to make up the difference between what America imports and what it sells overseas. Economists expect that figure to climb even higher in coming years representing the growing size of U.S. assets now in the hands of foreigners, reflecting all of the trade deficits run up over the past three decades.

Later

1400h - JPY : BoJ announces rate decision. (Market expects rates to hold, Nikei index might see more strength)

1430h - JPY : BoJ speaks at conference

1500h - EUR : German Producer Prices

1700h - EUR : German IFO

2000h - CAD : CPI

Technicals

Long EUR/USD at 1.3240, Support might be seen at 1.3035

Fund Performance per day (inception date: 4 Dec 06) : 1.89576%

Yesterday

SEK - (Bullish) Sweden's Annual pace of decline in unemployment rate is slower than in October, but at 0.7% on the year, the pace of decline in unemployment is still robust.
A rate hike tomorrow and the promise of future rate increases in the Riksbank's inflation report is still very much on the cards.

CHF - (Neutral) The SNB has raised the range for 3-month libor by 25bp to 1.50%-2.50%, moving the target to 2.00% from 1.75% - as expected. According to the SNB, the reasons for the big downward revision of Swiss inflation are 1) lower oil prices, 2) the opening of the labour market, and 3)the SNB's proactive monetary policy. As consequence the SNB sees limited inflationary pressure untile the Q3 2009 end of the forecast horizon.

OIL - (Turning Bullish) A sliding Greenback would pressure OPES to push oil prices up. which is why several Opec members, including Saudi Arabia, have talked up the chances of another cut. But Saudi's contribution may be as much for internal consumption as anything else. Yesterday, the International Energy Agency said Opec had only cut 610,000 b/d since October. Small cuts by Venezuela and Iran were largely down to maintenance. Saudi, tired of shouldering the lion's share of real cuts, may press others to take action. A further cut would be both unnecessary and difficult to enforce. A $60 floor has already been established, which should be a signal for more, rather than less, output. Oil inventories have already dropped. If winter intensifies, the market could be left short in the first quarter of 2007 and oil might spike back over $70, hurting overall demand. The problem is, despite some softer words from Saudi yesterday, Opec's rhetoric has stoked expectations of another cut, so the oil price could well fall, even if one does not come.

USD - (Turning Bullish) The sinking U.S. real estate market, whose meteoric rise in the last five years allowed consumers to draw on their housing equity to spend freely, has become the wild card in the outlook for 2007. To be sure, only a minority of economists now believe that the housing bust will spill over into the rest of the U.S. economy and trigger a full- blown recession. The U.S. Federal Reserve left its interest rates untouched Tuesday for the fourth straight time, holding firmly to its position that a slowing economy will subdue inflation in the months ahead.

EUR - (Neutral) ECB has signaled it is likely to raise interest rates further, arguing that inflation pressures persist in the 12 countries using the euro. A euro-zone inflation rate of 1.9%, while still within the preferred range, could herald higher 2007 inflation than euro-zone central bankers currently forecast.

Today

JPY - (Neutral) (From AFX) The Tankan survey of business sentiment for large manufacturers confirmed a continued recovery in the industrial sector but it may not be a strong incentive for the Bank of Japan to raise interest rates this year, said Norio Miyagawa, an economist at the Shinko Research Institute. The Bank of Japan said the headline diffusion index for large manufacturers jumped to 25 in the December survey from 24 in September, marking the third straight quarter of improvement and matching market expectations.

Later

1700h - EUR : Italian Trade Balance

1800h - EUR : Eurozone CPI

2130h - USD : CPI / Empire Manufacturing

2200h - USD : TIC Data

2215h - USD : Industrial Production

Technicals

Fund Performance per day (inception date : 4 Dec 06) : 1.8544%

Yesterday

USD - (Neutral) The Trade deficit narrowed 8.4 percent from September’s figure to $58.9 billion. Fed's Policy Board decided to keep Federal Funds rate, as expected. Even the brief statement that followed the decision could not rally momentum behind the dollar either way. Market Sentiment is that the US economy is slowing down and I feel that we need more hawkish figures to confirm more USD strength.

Today

USD - (Neutral) The Federal Reserve signaled that while the economy looks a bit weaker than a month ago, its forecast and concerns about inflation are unchanged, and thus interest rates are still more likely to rise than fall. The Fed yesterday left its short-term interest rate at 5.25%, where it has stood since late June. In the statement accompanying its decisions, the Fed downgraded its assessment of the housing market and acknowledged "mixed" signals on growth. But its forecast of moderate growth is unchanged. Inflation remains its principal focus, and it still says its choice is whether to raise rates -- not to lower them. Bernanke was again dovish and still sees slowing growth as the factors ultimately bringing down inflation. A lot of talk in the market about the Fed easing next year: –An end-of-May rate cut now a 67 percent probability event as indicated by futures.

Later

1800h - GBP : ILO Unemployment Rate / Jobless Claims Change / Average Income Bonus

2130h - USD : Advance Retail Sales / Retail Sales less Autos


Technicals

Long EUR/USD at 1.3290

Long GBP/USD at 1.9740

Fund Performance per day (inception date: 4 Dec 06) : 1.97762%

Friday

EUR - Traders focused on US non farm payroll after the ECB rate hike and comments from Trichet. Trichet was generally upbeat about European growth, which was also reflected during the ECB December staff projection meetings. However despite a string of hawkish economic data during the European hours, traders looked to the non farm payroll to decide their net positions on the dollar cross.

Today

JPY (Neutral) - (From Saxobank) A story in the Japanese Jiji News stated that the BoJ would keep rates unchanged. This resulted in yet another round of JPY selling across the board, supported by a streak of weak Japanese macro economic data recently. Both CPI figures, GDP figures and other, monthly releases are still painting a picture of an economy struggling to overcome the deflation and stagnation since 1990. The hope (for Carry Traders, at least) seems to be that JPY will forever stay a weak and struggling funding currency vs. the high yielders.

USD (Gaining strength) - US Treasurer, Paulson, was out in China on Friday, calling for more "foreign exchange rate flexibility", which theoretically equals a lower USD/CNY exchange rate. The market reacted by sending the USD higher, not lower. This tells us that there was a critical mass looking for a trigger to buy USD. In other words, EURUSD is no longer a one-way street as it was after the break of 1.2980.

OIL (Turning Bearish) - Two years ago Saudi Arabia, the world's biggest oil exporter, opened its spigots and let supply out-pace demand. The result was a gradual build up inoil inventories in the US, Europe and several Asian oil-consuming countries. This month Ali Naimi, the country's influential oil minister, appeared abruptly to reverse that accommodating policy. At a meeting in Cairo he told reporters that the market was "significantly" oversupplied. "Inventories in the US are high, not low . . . That's why the market is out of balance," the minister said, adding that 100m barrels of oil should be cut to rebalance it. Inventories have indeed swelled in recent years. By the end of September, stockpiles in the world's 30 biggest oil-consuming countries were at eight-year highs, holding enough oil to last 55 days of consumption. This worries Mr Naimi because, as the spare-oil cushion in consuming countries has grown, some of the power to influence world oil prices has shifted from the Organisation of the Petroleum Exporting Countries to its customers. Saudi Arabia has already begun to regain its clout and rebuild its own cushion of spare supply, which dwindled as the kingdom tapped into it over the past years to quench a growing thirst in the US and China. Saudi Aramco, Saudi Arabia's national oil company, is on schedule to boost its production capacity from 10.5m to 12.5m barrels a day by 2009, while the energy ministry is keeping tight control of exactly how much of this it chooses to pump each day. The rest remains underground, for use in the event of a sudden supply interruption elsewhere in the world. In fact, signs of a shift in Riyadh's policy began to emerge in October. It was Saudi Arabia's idea that Opec agree to reduce its production by 1.2m b/d at the cartel's October meeting in Doha. On Thursday the 11-member group is scheduled to meet again, this time in Abuja, the Nigerian capital. Mr Naimi's utterance and the immediate echo of agreement from other ministers in Cairo is the best indication yet that the kingdom and Opec are seriously considering another cut to further trim the inventories outside their control.

Later

1730h - GBP : CPI

1800h - EUR : German ZEW Survey

2130h - USD : Trade Balance

0315h - USD : FOMC Rate Decision

Technicals

Look for a retracement towards the 1.3030-area for the EUR/USD

Fund Performance per day (inception date : 4 Dec 06) : 1.27479%

Yesterday

EUR - European Central Bank president Jean-Claude Trichet said markets should not interpret his comments at today's ECB news conference as pointing to an interest rate hike in February.
Trichet told the news conference that the ECB needs to act 'in a firm and timely manner' to control inflation. 'Looking ahead, acting in a firm and timely manner to ensure price stability in the medium term is warranted,' he said. But Trichet dropped his previous reference to the need 'to further withdraw monetary accommodation' if the economic recovery continues in line with ECB expectations. The ECB has hiked rates once every two months in the second half of this year, culminating in a further hike in the central bank's main rate to 3.50 pct today.
Maintaining this pace of monetary tightening would point to a further rate hike in February.

GBP - BoE kept rates unchanged yesterday. This could be a signal of less than bullish data ahead.

NZD - The Kiwi found renewed strength on the back of RBNZ rate decision which meant leaving the cash rate at 7.25%. the accompanying statement saw hawkish comments by RBNZ's Bollard that said "Further tightening cannot be ruled out, and any policy easing still considerable way away." So for now the kiwi carry trades lives on, but it should only be considered more attractive levels to short NZD against pretty much everything as we believe that 2007 will be the year that the NZD finally sees some significant downside correction.

JPY - Downward revisions in third quarter GDP is not likely to sway the Bank of Japan from deciding on an early rate hike either this month or in the first quarter of next year, but its policy stance could change, depending on the outcome of next week's Tankan survey, economists said.
They said it is also far from clear whether the central bank can continue its rate adjustments at a measured pace -- or even when it can make a third rate increase after the next one -- given that US economy is slowing and is taking the Japanese economy along with it.

Later

USD (Neutral) - Traders eagerly anticipating the jobs data later. A dovish report could trigger much EUR buying.

EUR (Bullish)

JPY ( Neutral)

NZD (Bullish)

1900h - EUR : German Industrial Production

1900h - EUR : Euro Zone OECD Economic Leading Indicators

2130h - USD : Change in Non Farm Payrolls / Unemployment Rate


Technicals

Long GBP/USD at 1.9740

Long EUR/USD at 1.3415

Fund Performance per day (inception date : 4 Dec 06) : 1.73497%

Yesterday

EUR - (Bullish) Germany's inflation rate will be set sharply higher by a three percentage point rise in VAT next January, but Europe's biggest economy will avoid a collapse in consumer spending, according to a survey on Tuesday. Retailers and service providers appear confident that Germany will escape "a protracted negative impact" resulting from the tax hike. However, private consumption growth could fall by about a percentage point after the increase takes effect on January 1, and inflation will rise by 1.2 percentage points as a result - higher than previously estimated.

USD - (Gaining strength) Bernanke's Hawkish comments last week start to makes sense. Property market activity has taken a big hit, with housebuilders bearing the brunt. They are discounting heavily in an effort to shift the glut of unsold homes. In an attempt to bring supply and demand back into balance, they are also building fewer homes. The economic slump is crimping economic growth and pushing up delinquencies among riskier US mortgages - as HSBC noted yesterday. But the housing downturn looks to be decelerating and a number of leading indicators are showing signs of perking up. Mortgage rates are lower and income growth has been outpacing house price inflation, making housing more affordable. The S&P 500 Homebuilders Index is up about one third, although it remains 30 per cent shy of last year's July peak. Traders will be focusing on the crucial non-farm payroll numbers on friday to decide if the appreciation of the EUR should continue.

JPY - (Turning Bullish) (From UBS) The carry trade environment remains fragile with the market yesterday reacting to comments by BOJ board member Nishimura that the central bank can act even if the market does not match the BOJ's view of the economy. This follows on from fellow board member Mizuno's comments earlier this week arguing that interest rates could be raised even if Japan's economic indicators were not all strong. GDP revisions and machinery orders on Friday and the Tankan next week are key releases now to watch.

Later

1445h - CHF : Unemployment Rate

1500h - EUR : German Wholesale Price Index

2000h - GBP : BoE Rate Decision

2045h - EUR : ECB Rate Decision

Technicals

Go Long on EUR/USD at 1.3595

Fund Performance per day (inception date: 04 Dec 06) : 2.59935%

Today

Market Bias - USD viewed as undervalued by FX Markets

AUD (Forecast is neutral) - The current account deficit narrowed by less than expected in the September quarter 2006 to $12.1 billion (market median: $11.0 billion). The narrowing of the current account was due to the decrease in the trade deficit, which was due to stronger imports. However, exports is expected to pick up after the drought has lifted in mid 2007. The drought toegther with high fuel prices also sent the services sector index down.

USD - (Neutral ahead of ISM data) Traders will be focusing on the ISM Non Manufacturing Data before going long on the GBP and EUR.

JPY - (Bullish) The yen is at its four month highs against the dollar and recouping much of its recent losses against the euro, on speculation that the Japanese central bank could raise interest rates again soon. The currency's gains came after Bank of Japan board member Atsushi Mizuno was cited by Reuters as saying that there is no need to wait until all economic indicators are strong before raising interest rates again.

EUR - Cable and the euro were unable to benefit from news of stronger-than-expected services sector PMI surveys out of the UK and the euro zone. The news was offset, however, by a very disappointing retail sales survey from the British Retail Consortium released overnight. ECB is scheduled to announce its latest interest rate decision on Thursday, with a quarter point rise in its key rate to 3.50 pct fully expected. Market players will therefore be looking to the accompanying press conference for any indications on the interest rate outlook going into next year.

Later

2100h - CAD : BoC Rate Decision

2200h - USD : ISM Non Manufacturing

0700h - GBP : Nationwide consumer confidence

0730h - AUD : GBP YoY and MoM

Technicals

USD/JPY - Short at 114.20

Fund Performance per day (inception date : 04 Dec 06) : 0%

Today

AUD - (neutral) : AUD Q3 Company Gross Profits were Up 0.6%, Building Approvals were down 7.4% from September. Looks like the RBA will be keeping rates.

JPY - (neutral) : The latest quarterly government survey showed that spending on building factories and upgrading production facilities continued to grow in the past quarter but at a slower rate than the record-breaking pace of the previous three months, which could prompt the government to downgrade GDP data for the period, analysts said. But they also stressed that despite moderation in the growth pace of corporate capital spending, the quarterly survey underscored the solidness of the corporate sector, which had underpinned the Japanese economy over the past few years.

EUR - (Correction expected but Still Bullish overall) : Spain's jobless data were up 1.5% MoM but 3.4% down YoY. UK's Construction PMI is 54.8 down from the 2.5 year high of 58.1 in Oct. Traders still feel the figures are not sufficient enough to push to GBP/EUR to the last support level.

EUR - ECB is not sure whether to rise rates or keep them as they are. Eurozone borrowing costs are almost certain to rise by another quarter-point this week, but the European Central Bank faces a more difficult job: deciding whether or how it might signal a slowdown or pause in further interest rate rises in 2007. Economic indicators have surprised on the upside; the ECB frets in particular about fast-growing credit and money supply data. Forecasts for next year might have shown inflation with that range too, if it were not for a three-point rise in German value added tax next month. Meanwhile, the euro's rise could have a braking effect on the economy similar to that of higher borrowing costs. Other factors include the risk of a US slowdown having knock-on effects on the eurozone, and the complications created by Germany's VAT increase.

USD - Traders will looking to new economic data and the tone from the European Central Bank for fresh reasons to trade on the dollar. The ECB will this week be watched closely for clues about future eurozone interest rates. Financial markets will scrutinise carefully the words of Jean-Claude Trichet, ECB president, for signals on the pace of increases in 2007 and any signs of concern on the currency. Some analysts think Mr Trichet may seek to create more room for manoeuvre on the timing of future moves, increasing the risks for traders purchasing euros. The most important release of economic data will be the US employment report on Friday.

OIL - Inventories of crude oil are too high, indicating that OPEC, which supplies two out of every five barrels, should cut output. Ministers of the Organization of Petroleum Exporting Countries will next meet in Nigeria on Dec. 14 to decide whether to cut production for a second time in two months. But among the world's biggest consumers of oil there is unease at the prospect of production cuts from the cartel. The U.S. energy secretary, Samuel Bodman, said last week that OPEC should refrain from another cut, because a colder-than-average winter in the United States may increase demand.

Later

1900h - NZD : ANZ Commodity Prices

Fund Performance per day (inception date: 20 Oct 06) : -0.064217%

Friday

JPY - (Neutral, looking ahead) Lower than expected CPI for November were released on friday, which makes the market uncertain as to when BOJ will decide to increase rates.

GBP - (Short Term Correction expected, looking ahead) Cable gained on weaker than expected ISM figures, traders were very bullish on the Pound and sent the GBP/USD cross to all time highs once again.

USD - (Short term rebound, looking ahead) (From dailyFX) The national ISM survey of manufacturing conditions fell below the 50 mark, indicating that activity contracted rather than expanded in the month of November. With five out of the ten underlying components including employment, new orders and production contracting, the possibility of a recession in the US economy is growing. The weakness of the housing market is finally spreading to the rest of the economy and both traders and economy watchers are worried. The US dollar has fallen once again while the stock market tanked on the back of the report. In addition to the ISM, construction spending also dropped by 1 percent with a comparably large downward revision to the September data. Interestingly enough though, Fed President Plosser as well as the ISM head downplayed the significance of the report. They felt that a one month contraction was too little to deem the entire sector as recessionary. In fact, we would need to 6 months of sub 50 readings to label it as such.

Later

1700h - GBP : PMI Construction Survey

1800h - EUR : Euro Zone PPI

Technicals

Sell - USD/CHF at 1.1920

Buy - EUR/USD at 1.3235