London

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 made slight gains against the US dollar as a bank holiday in the US eased trade volumes, however GBPUSD remained close to 18 month lows as ongoing concerns about the Eurozone, and in particular the ratings downgrades leave risk appetite at a low.
• The pound remained over the €1.20 mark against the euro, driven by concerns following the European downgrades late last week as well as the weight of Greece and their next bailout.
• Sterling has been driven by safe haven flows and this was increased by the ratings downgrades as investors swapped their Euro government debt for UK Gilts instead driving the price down very close to a new record low.
• The UK treasury has this morning announced plans to make London the leading inter nation trading centre for trading the Chinese Yuan, saying that as a gateway to Europe London is the perfect base for Asian banking and investment.
• House prices in England and Wales fell by 0.8% on the month (+0.4% on the year) in January, according to property website Rightmove, to £224,060. In December prices fell 2.7% on the month, to £225,766 (+1.5% on the year). 

ELSEWHERE

• Following yesterday's news that the Euro was close to an 11 year low against the Japanese Yen the pair swiftly broke that new record following investors seeking the safe haven Yen falling to 97.04. The Yen gained against 13 of its 16 key trading partners giving an indication of the knock on effect of the Eurozone downgrade.
• In news this morning the European Financial stability Fund (ESFS) has lost its triple A credit rating following the downgrade of France and Austria last week. The rating was cut to AA+ from AAA, S&P had warned that it may face a downgrade if it's guarantors lost their triple A status.
• Concerns over the latest Greek bailout and whether it will go through may ease on Wednesday, following the stalling of talks due to a disagreement about how much money investors will lose by swapping their bonds. Talks between Greece's Prime Minister Lucas Papademos, Finance Minister Evangelos Venizelos, and Charles Dallara, the managing director of the Institute of International Finance, which represents private creditors, will resume Jan 18th.
• Canada's dollar rose against all but two of its 16 major peers on speculation its exports will benefit from accelerating U.S. economic growth. Reports on manufacturing from the Fed may show further growth later this week.
• In news this morning China's GDP fell to a 2 and a half year low but beat expectations posted allaying fears that China is set for a hard landing, this led to a selloff of safe haven currencies such as the US dollar and JPY and brought a touch of risk appetite back to the market.
• Off the back of the Chinese data this morning the Australian dollar posted some consistent gains against a host of currencies as investors foresaw a demand for commodities from China, Australia's biggest export market. 

DATA TO LOOK OUT FOR (all times GMT)

• A busy morning for data starts with UK Consumer Price Index figures and Retail Price Index figures at 9.30am. Inflation has been stubbornly high causing problems for the economy but today’s CPI reading is expected to fall slightly to 4.2% whilst RPI is forecast to fall to 4.8%
• Bank of England Governor Mervyn King speaks today at 10.00am.
• Eurozone Inflation figures are released at 10.00am, like the UK, annual inflation is expected to have fallen slightly to 2.8%.
• German ZEW survey is released at 10.00am and will give an indication of sentiment surround the German economy.
• Bank of Canada release their interest decision at 2.0pm, they are expected to leave rates on hold at 1%
• Westpac Consumer Confidence figures are released for December at 11.30pm

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

• The Bank of England are expected to keep interest rates on hold this afternoon at the monthly interest rate decision meeting and will maintain its £275bn bond purchase target.
• UK services and manufacturing gauges unexpectedly rose last month, showing the economy gained a little strength (but only modestly); however the BoE has indicated that the economy may in fact be stagnating as recovery is impaired by the European debt crisis.  Sterling opens trading today against the euro at €1.2036, nearly a cent down on the start of the week.
• Debt worries in the Eurozone weighed on the London markets yesterday as disappointing economic data dampened the mood and pulled the FTSE lower.
• Today sees an illustration of how Britain can be affected by the Eurozone crisis as RBS announces 3,500 jobs losses.  The European crisis has forced securities firms to scale back or close divisions that trade European equities – and the UK and The City is acutely affected by this shift. 

ELSEWHERE

• Although showing growth of approximately 3% over the year, the German economy worried the markets by posting a contraction of 0.25% in an unofficial release.  Schulz, a senior economist at Berenburg, sees a ‘25% chance of the euro crisis remaining out of control longer…spiralling out of control with a series of sovereign and bank defaults’.  In such a scenario, Germany would enter a major recession.
• The euro suffered from heightened risk aversion as some investors may expect the euro to drop should the union break up.
• Rumours have surfaced that the French government had be notified by S&P that a downgrade of its AAA status is looming.
• Despite morning gains against both GBP and USD, the euro ended the day at $1.2698 against the greenback, with losses compounded on the back of EU growth forecasts.
• USD saw a definite flight to safety in light of these concerns over a European recession.  USD moved to a 16 month high against euro, whilst cable fell to a three month low of $1.5308.
• Officials from the Fed reserve are undecided on the need for further easing. Sung Won Sohn, former chief economist at Wells Fargo suggests that “ despite recent signs of improvement, Fed officials are very vigilant about the economic recovery continuing and improving,”
• Asian stocks fell for the first time in four days, while gold rose as data showed slowing demand for Japan’s exports. 
• Oil rallied 0.5% to $101.38 a barrel, while natural gas slumped to a 28-month low – easing the pinch on domestic costs a touch.
• The New Zealand dollar weakened against 15 major currencies but still remains at an inflated value of 1.9228 against the pound  - this slide is largely due to a drop in the value of commodity prices according to ANZ bank. 

DATA TO LOOK OUT FOR (all times GMT)

• Today both the ECB and MPC deliver their monthly rate decisions.
• The United States release both core and non-core retail sales data at 13:30, with both expected to have increase by 0.1%.
• US Unemployment Claims are also expected to climb.

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

• British Prime Minister David Cameron says that Britain will not ratify the Franco-German proposals to change the EU Treaty without safeguards for British interests and The City of London. 
• Following yesterday’s announcement that S&P have placed a further 15 of the 17 Eurozone states on a negative watch, including France and Germany, GBP/EUR moved to a rate of €1.1711. 
• In the lead up to the open of the European markets GBP/EUR trades at €1.1627 arguably on the back of support for planned changes to the EU Treaty for the United States.
• The British Retail Consortium indicate the early advent of sales on the British high street has contributed to a contraction in the pace of retail inflation.  Whilst Food price inflation remains on the up, other retail items saw a contraction by 0.1% to 2% for previous 2.1% posting.
• Josh Raymond of City Index asserts that major currency trading will remain largely headline driven until sentiment from Friday’s EU summit and minutes from BoE can be assessed fully.  GBP will benefit from a more or less coordinated effort to lower rates around the world coupled with protection of Britain’s AAA rating. 

ELSEWHERE

• The European Financial Stability Fund (EFSF) has also come under scrutiny from ratings agency Standard and Poor’s, who have warned that it could downgrade the AAA rating of the fund.
• Timothy Geithner, US Secretary of the Treasury, spoke yesterday of an emphasis on the importance of success in the EU talks, not only for the EU and US, but for the Global economy as a whole; overnight USD moved to a rate of $1.34 against EUR, but has slipped back to $1.343 following the European open.
• Analysts in Asia have warned of the immediate risk of contagion globally, and as a result many Asian economies have ‘trimmed’ their growth forecasts, but the area itself does see the potential for medium term growth on the back of an increase in demand with closure of a percentage of European export markets.
• Dutch heads of business have come out to urge EU political leaders to push forward urgently.  With over one third of their exports going to Southern European countries, fears voiced by The Netherlands place greater pressure on EU heads of state to satisfy the markets’ appetite for stability in the Eurozone.
• This morning the Secretary General of OPEC, speaking in Doha, said that he hoped the EU would not go ahead with a proposed ban on Iranian oil.  At present Iran supplies the EU with around 18% of its oil, or 450k barrels a day, and the Secretary General warns that this amount would be very hard to replace if sanctions come into place.
• Australia posts GDP figures in line with expectation at 1%, but below the 1.4% growth shown last quarter.  GBP/AUD moves from a rate of 1.5228 to 1.5182, and marginal risk appetite comes back to certain Far Eastern currencies; SGD strengthens against GBP slightly. 

DATA TO LOOK OUT FOR (all times GMT) 

• 11.00am German Industrial Production figures are released.
• MBA Mortgage Applications is released at 12.00pm in the US
• In New Zealand at 8.00pm, the RBNZ release their interest rate decision. The markets aren’t expecting any change to the current 2.5%
• Japanese Trade Balance is released overnight.

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.