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At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

IN THE <?xml:namespace prefix = st1 />UK

• Sterling started the morning session by trading in and around the $1.5650 level to later post a 5 week high at $1.5735 versus the USD.
• GBP/EUR hit a 4 week low on hopes of progress in Greek debt talks and worries about UK economic weakness posting a low of €1.1915 in the afternoons trading session.
• Analysts said poor fundamentals in the UK may limit any upside for sterling against the dollar, especially on the back of the release of the MPC meeting minutes on Wednesday.
• CBI figures released yesterday showed sales suffered their biggest annual fall in January since March 2009 (when UK was last in recession) posting a figure of -22 against a forecast -2.

ELSEWHERE

• USD has come under selling pressure after the U.S. Federal Reserve said on Wednesday it would keep interest rates near zero until late 2014 and the option for further QE still remains.
• EUR/USD traded as high as 1.3184 to its strongest in a month, stronger German consumer confidence contributed to this rally by easing concerns about a Eurozone recession.
• Japanese Yen rallied against the USD yesterday as US 10-year Treasury yields fell 2%, the dollar-yen pair is closely correlated with US debt with lower yields providing less incentive for Japanese Investors to seek income overseas, in turn strengthening the Yen.
• Italian 10yr bonds dropped below 6% (5.98%) for the first time since the ECB announced plans for emergency 3 year loans in December to prevent a credit crunch in the Eurozone.
• For the first ever, German 10 year bunds are selling at a lower yield that US Treasury bonds, yields are directly correlated to the risk attached to the investment and this turnaround in sentiment is significant as it shows despite the Eurozone crisis, Germany is still seen as safe bet.  a
• Low employment in Germany helped boost sentiment within the Eurozone for a 5th month in a row, morale in Germany should increase further in the month of Feb.
• EUR/USD repel negative EUR news including the continued rise in Portuguese bond yields and reports that the ECB is split on how to handle their holdings of Greek debt.
• There was also comments that a Greek deal could be close to with creditors ready to accept a lower coupon payment. A majority of these rumours end up being red herrings, so sceptical views remain about the accuracy.
• All 3 commodity currencies strengthened verses the USD amid the possibility of further QE from the US. The AUD and NZD both reached highs not seen since October and the CAD broke the parity line during yesterday’s trading. 

DATA TO LOOK OUT FOR (all times GMT)

• ECB President Mario Draghi, speaks today at 1.15pm
• US GDP is released today at 13.30pm, the market will be paying particular attention to this, from the release of the FOMC statement Wednesday evening, the data is expected at 3.0%
• US University of Michigan consumer sentiment figure, is released at 2.55pm and is expected to post a figure of 74.2 against last month’s figure of 74.0.   

Have a great weekend.

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

IN THE <?xml:namespace prefix = st1 />UK

• Bank of England policy maker Adam Posen spoke last night and said officials will increase their bond-purchase target next month if new forecasts for growth and inflation justify expanding stimulus again. “If we choose to do more in February, which we may or may not, but IF we choose to do more in February, it’ll be because the forecast demands it,” The central bank, which last expanded stimulus in October to £275bn with a program that is due to be completed early next month. 
• GBPUSD continued on a steady rise yesterday but the pound rally stalled at the $1.5600 mark as US stocks erased gains and turned negative in afternoon forcing the pair to stay in the $1.55’s
• Tomorrow, the BoE will publish the minutes of the January policy meeting, revealing how the MPC voted. The Office for National Statistics will release the first estimate of fourth- quarter GDP data at the same time
• The pound remained below the key €1.20 level against the euro and has seen further losses this morning dropping to a low of €1.1918.

ELSEWHERE

• The euro pushed through the $1.30 level against the US dollar yesterday, bolstered by optimism that Greece was set to cut a deal with its private sector investors on a debt swap. Despite no official resolution, the markets are beginning to gain confidence that an agreement will be reached. The main stumbling block at this point seems to be over what coupon creditors will receive on the planned new bonds. Some official say that Greece will pay not more than 3.5%, while creditors are pushing for more than 4%.
• The Greek talks are now expected to be concluded by the end of this week and with a lot of Eurozone data the euro could see more positive movements.
• Although the US Dollar sustained losses yesterday, it consolidated against its leading counterparts in overnight trade.
• Brazil will make room for a more “flexible” monetary policy as the government seeks to ensure economic growth of at least 4% this year. President Dilma Rousseff said he will cut enough of Brazil’s 2012 budget to ensure the government meets its target of a budget surplus before interest payment of 139.8bn reals ($79.7bn).
• Spanish economy minister Luis de Guindos said Spain is sticking to its deficit goal even as the economy shrinks, underlining a rift in the month-old cabinet whether the nation can halve its shortfall during a recession.  De Guindos said Spain’s government has an “absolutely inescapable commitment” to austerity, when asked whether he agreed with Budget Minister Cristobal Montoro’s call on Jan. 22 for the European Union to ease Spain’s 2012 deficit goal to take the shrinking economy into account.
• India’s rupee rose past 50 a dollar for the first time since November as the central bank left borrowing costs unchanged today to support economic growth.  The Reserve Bank of India kept its benchmark rate at 8.50% at 11 a.m. in Mumbai. The central bank cut the cash-reserve ratio for banks to 5.5% from 6%.

DATA TO LOOK OUT FOR (all times GMT)

• A host of flash Manufacturing & Services data from Europe this morning. Both French & German sets of services data have shown a increase in confidence.
• Eurozone Industrial New Orders are released at 10.00amg a contraction of 2.1%.
• UK Public sector net borrowing forecasted at 12.4bn from a higher figure of 15.2bn seen in December.
• Core retail sales in Canada at 1.30pm, they have seen steady sustained growth in this sector in the last three months and are expecting another modest figure of 0.2% growth today.
• Bank of England Governor Mervyn King speaks tonight at 8pm in Brighton.

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

IN THE UK

• Wednesday saw The MPC minutes reveal a unanimous vote to hold UK interest rates at their record 0.5% low for another month and although members did not rule out the possibility of further QE completely, they did vote to hold the current facility at £275bn.  Their sentiments were broadly dovish which pushed the pound to an 11 month high against EUR.
• Public Sector Net Borrowing came in under the 15.5B expected volume at a level of 15.2B.
• Ratings agency Moody’s acknowledged the severity of the UK plight, but asserted that Britain deserved to retain its AAA rating which helped the pound gain against EUR.  GBP/EUR breached 1.20 with a high from the day of 1.2043.
• UK retail insolvencies may reach the highest level in four years according to restructuring firm ALIX Partners; poor forecasts for UK retail sales over the Christmas period may put a dampener on the headway made by the pound in recent days. 
• GfK NOP UK consumer confidence fell to its lowest level since February 2009 decreasing -33 points in December from -31 the month before.

ELSEWHERE

• Although the number of Existing Home Sales in the US fell short of the expected 5.04M to 4.42M realtors are happy to see a month on month increase (in spite of a change to the calculation metrics that had been used since 2007).  USD moved up to a high of 1.5662 against the pound simultaneously.
• European banks have asked to borrow €489bn from the European Central Bank’s new three-year loan facility, smashing expectations forecasted at €293bn.  Demand within the banking sector for this short term liquidity is mirrored by an on forecast level of European Consumer Confidence which published a -21 response.
• Danish Prime Minister Helle Thorning-Schmidt faces domestic opposition to the proposition of deepened fiscal ties within Europe even after he vowed to fight on for unity in the area.
• Rumours of a French sovereign debt downgrade were still doing the rounds yesterday, which served to further sour sentiment.
• EUR/USD failed to move outside its range bound trading, and analysts feel that the risk is now to the downside for the single currency as risk off returns to the market.  At present 1.3080 represents the immediate level of resistance for the pair after EUR attempted to win favour at 1.32, but pundits feel that 1.30 could well be tested as yesterday’s lows signified an important break.
• New Zealand’s quarter on quarter GDP figures achieved higher than market expectations reaching 0.8% as opposed to an expected 0.6%; this has seen GBP/NZD move down to 2.0353 overnight following sustained trading in GBP favour over the past week.

DATA TO LOOK OUT FOR (all times GMT)

• Data is somewhat soft for today with Final GDP and quarterly Price Index figures released at 13:30 for the United States.
• Final GDP figures are expected to come in at 0.5%
• US unemployment claim, expected to be higher than the previous 366k posting, are also due at 13:30.
• Core Durable Goods Orders also make appearance on Friday which may put pressure on the greenback.

Portfolio and fund managers will be looking to window dress their portfolios before year end, so watch out for a return to risk off an quality as the week draws to a close.

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.