The month of October was characterized by rising worldwide equity indexes, highlighted by the Dow Jones Industrial average reaching a record. Base metals prices rose while energy markets cooled. Superfund systems were also able to take advantage of late month advances in currencies, particularly in Europe.
Gains in the British Pound
After sustaining losses in September in the British pound, Superfund Trading Systems were able to profit in October from short positions in 3 month Sterling futures. Data released last month showed the UK economy registering impressive growth of 2.8% in the third quarter, well ahead of forecasts. Similarly, inflation reached an eight-year high of 3.6% stoking fears of an almost certain rate hike by the Bank of England and increasing the possibility of a second increase in first quarter 2007.
Mixed Results and a Happy Ending for Swiss Franc Holdings
Superfund Trading Systems maintained long positions in the Swiss Franc throughout the month of October with mixed results. Initial concerns about inflation resulted in sideways movements until news of declining energy prices and a dovish US Fed policy statement, combined with strong domestic fundamentals, resulted in a late month Franc rally against the US Dollar.
Gains Registered From Falling Oil Prices
Superfund Trading Systems profited from short positions in NYMEX Crude Oil futures, which were down by nearly 7% during the month. Rising inventories, mild November northern hemisphere weather forecasts and perceived weakness in the OPEC cartel all combined to an easing in oil prices as well as concerns about supply disruptions elsewhere.