HSBC

QROPS update 1st August 2011 Pension income drawdown & Foreign exchange QROPS and QNUPS

Submitted by qrops on Tue, 02/Aug/2011

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).

 

Across the Atlantic, Friday's US July non-farm payrolls data will be in focus this week. Today,

investors will look at US July ISM data and US June construction spending data, both due at

14.00 GMT.

Focus over the weekend was on the US debt crisis, on Sunday evening leaders of both

parties in the US House and Senate had approved an agreement to raise the nation’s debt

ceiling by $2.1 trillion and cut the federal deficit by as much as $2.5 trillion over a decade, a

deal which must now be sold to Congress. This should be enough to satisfy the international

ratings agencies to sustain their AAA rating.

They are preparing to sell the deal to members to cut $917 billion in spending over a decade,

raisin the debt limit to $900 billion initially, and to charge a special committee with finding

another $1.5 trillion in deficit savings by the year’s end. This has a deadline for approval of

2nd August.

In reaction to the proposals, dollar and oil prices climbed and gold fell. The dollar rose 0.2%

to $1.4376 against the euro and 1.3% to 77.79 yen in Tokyo trading. GBP/USD has found

support above $1.64 after hitting a low of $1.6259

With just two days left before the US Treasury had said the nation would default, both sides

made concessions. Republicans dropped their insistence on withholding some of the

borrowing authority until future spending cuts had been made and a balanced budget

amendment to the Constitution had been passed by Congress.

If the super committee’s work failed to yield at least $1.2 trillion in debt reduction, sweeping

automatic spending cuts would go into effect affecting defence and medicare.

Congress could try to block the borrowing increase with a disapproval resolution, yet would

almost certainly fail to muster the two-thirds majority needed in both the House and the

Senate to override the President’s veto.

In terms of domestic economic data, the August Bank of England interest rate decision on

Thursday will fall under the spotlight. This morning we await the release of UK PMI data for

July with a consensus view of 51.1 down from a previous of 51.3.

 

IN THE UK

  • House prices in the UK are stabilising, according to the latest monthly report from the Nationwide building society. Prices across the UK rose by 0.2% in July, to £168,731, leaving them just 0.4% lower than a year ago.
  • The Footsie jumps in London on the back of Bank profits including RBS, Barclays and HSBC all reporting gains.
  • GBP/USD holds above $1.64 after hitting lows of $1.6259 as a return to risk on positions help the pound.
  • This morning PMI Manufacturing for July was released decidedly weaker than expected at 49.1 against a predicted 51.1, the pound initially falls but has settled now.

 

ELSEWHERE

  • Data released on Friday showed US GDP well short of expectations at 1.3% against an expected 1.7% and last quarter’s growth figure was revised lower by 0.4%, initially after the data was released the dollar started to make gains as investors remained cautious.
  • Finally headway has been made over the weekend on the US debt crisis, Democratic and Republican leaders have tentatively agreed to raise the debt limit by $2.1 trillion dollars in two tranches and reduce the federal deficit by $2.5 trillion. The deal still needs to be passed by Congress but the hard work is done.
  • Safe haven currencies such as the Yen, US dollar and Swiss franc all slip over the weekend after the US debt announcement as investors take a sigh of relief and start to buy riskier assets such as the pound and euro.
  • European stocks follow the risk appetite trend and trade higher.

 

DATA TO LOOK OUT FOR

  • Eurozone Unemployment Rate is published this morning and expected to remain at 9.9% showing there is little change across in the employment sector.  
  • At 3.00pm this afternoon ISM Prices Paid, and ISM Manufacturing are expected to show a slight fall, showing a slight drop in the manufacturing sector
  • US Construction spending (MoM) is also released at 3.00pm this afternoon
  • Without doubt the most important announcement today is when Congress vote on the recently proposed debt limit plans at 8.00pm this evening, with any luck we will come to work in the morning and everything will be agreed and the whole world can move on.

 

Current Spot Rates (9.30am)

1st August 2011

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.6457

1.1421

1.4894

1.5660

1.3044

8.5089

8.8231

12.8230

10.31

10.31

127.583

USD

 

1.4411

0.9050

0.9516

0.7926

5.1704

5.3613

7.79

6.27

6.26

77.525

EUR

0.6939

 

1.3041

1.3712

1.1421

7.4502

7.7253

11.23

9.03

9.03

111.709

 

 

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.

 

 

 

 

 

 

 

 

 

 

QROPS update 12th May 2011 Pension Foreign exchange QROPS and QNUPS

Submitted by qrops on Thu, 12/May/2011

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 or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, 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, QROPS and now QNUPS (Qualifying non UK Pension schemes).

 

Yesterday’s trading saw a quite dramatic rally in the value of the pound. A number of key

economic indicators, coupled with more hawkish comments that expected from the

Governor of the Bank of England served to fuel a 1.41% increase in the rate of the pound

and against the euro in particular. Sterling was not so boisterous against the dollar, ending

UK trading in the red at $1.6365 having dropped from the day high of $1.6517.

The improvement in the pound was fortified by profit takers rushing to short the euro after

Mervyn King’s briefing. The ECB’s non-committal approach to interest rate increases earlier

in the month also paved the way for the pound to consolidate a fractional improvement

after the weekend. King confirmed that despite the forecast on inflation increasing to 5%

for this year, the bank will not act quickly to increase rates. The CBI expresses the view that

the fading away of the effects of January’s VAT increase should see inflation ‘ease back

towards’ the target rate of 2% throughout next year. Whilst optimistic, this does not

address the question of economic growth, and as Alastair Darling, former Chancellor of the

Exchequer, was keen to emphasise, any increase in inflation even in the short term with

continue to harm the domestic economy and could seriously destabilise the rate of recovery.

The outlook for growth dropped to 2.7%, but King expects that certain previously

unaccountable or unforeseeable market forces, such as oil price spikes, will relax over the

course of the year leading to a natural correction.

The pound began the morning at a price of $1.1359, reaching a high of $1.1519, and closing

at $1.1514. Although achieved at short notice and following unimpressive data earlier in the

month, the breach of $1.15 is in line with both HSBC’s and Lloyd’s forecasts for GBP/EUR at

stage in the annual cycle.

The euro made gains against both USD and JPY over the course of the afternoon. Against

the yen the single currency lost 1.5% in value with a low of 114.78.

With a deluge of US related information primed for release just after midday (GMT), the

markets are likely to remain choppy until the end of the week. Producer Price Index, Retail

Sales and unemployment claims will all be complemented by the testimonial of Fed

Chairman Bernanke at 3.00pm.

Manufacturing figures from the UK are likely to show a fractional increase in domestic

activity, but with demand expected to remain low into the longer term, it would seem that

any growth or contraction in the sector will do little to affect the value of the pound. If

anything, the 0.3% forecast growth serves to emphasise and support Mervyn King’s

sentiments today.

 

IN THE UK

  • Bank of England inflation report more hawkish than expected, growth forecast lower but inflation set to break 5.0%
  • With inflation set to rise to 2.5 times the government’s target, King suggests interest rate rises are back on the agenda and bets move to a 3rd quarter rise rather than December as previously price in.
  • The pound sees significant gains against the euro breaking €1.15 as interest rate differential speculation between the UK and Eurozone seems to have gone full circle as the ECB become less definite moving forward.
  • The outlook for growth dropped to 2.7%, but King expects that certain previously unaccountable or unforeseeable market forces, such as oil price spikes, will relax over the course of the year leading to a natural correction.
  • GB Trade Balance deficit widens by -£0.7B, data released showed -£7.7B although exports have risen.  

ELSEWHERE

  • Commodities struggle and Oil falls 5.0% overnight, dropping below $100 a barrel, will we see this at the pumps? Very unlikely!
  • Poland surprised the markets and increased their interest rates to 4.25%
  • One day strike in Greece brings country to a standstill, and concerns still stand that a default/restructure could be a major threat to global stability.
  • “Anti-bailout” Finland appear to agree to terms of Portuguese bailout which can only be good for euro stability.
  • EUR/USD drops to lows of $1.4189 on risk aversion and the euro loss of 1.5% in value against the Yen with a low of 114.78.
  • Spanish earthquake to put further stress on ailing domestic market.
  • USD trade balance released as -48.5B against -46.8b expectation, slightly better than expected but nothing to celebrate.
  • Australian employment data much worse than expected as employment drops by 22k after last month’s gains of 43k 

DATA TO LOOK OUT FOR

  • Busy day for data announcements starts with the ECB Monthly Report at 9.00am, the report will reveal a detailed analysis of the prevailing economic situation in the Eurozone, there’s unlikely to be too many surprises after the ECB press conference on Thursday
  • 9.30am sees the release of Industrial and Manufacturing Production figures in the UK, the markets are expecting to see a rise in both numbers and this could help the pound after yesterday’s inflation report.
  • European Industrial Production figures are released at 10.00am
  • 1.30pm focus turns to the US where Retail Sales and Producer Price Index figures are published, retail sales are expected to rise slightly which should help the dollar, whereas PPI is expected to fall and will push back chances of a US rate rise, hurting the USD
  • Fed chairman Ben Bernanke speaks at 3.00, his words are closely followed by investors
  • NEISR UK GDP Estimate for the 3 months leading up to April are released at 3.00pm and will give an indication of what the next official GDP figures might look like. 

Current Spot Rates (9.00am)

12th May 2011

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

SEK

ZAR

JPY

GBP

1.6336

1.1493

1.5381

1.5762

1.4479

8.5672

8.9649

10.30

11.29

132.387

USD

 

1.4212

0.9415

0.9649

0.8863

5.2444

5.4878

6.31

6.91

81.040

EUR

0.7036

 

1.3383

1.3714

1.2598

7.4543

7.8003

8.96

9.82

115.189

 

 

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for 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.

 

 

 

 

 

QROPS Update 26th October 2010 Pension Foreign Exchange Report QROPS & QNUPS

Submitted by administrator on Tue, 26/Oct/2010

We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.  

Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory.  In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.

Sterling hit a near 7 month low of €1.1188 yesterday over the on-going concerns the Bank of England will need to pump extra money into the economy in the form of quantitative easing. Investors eagerly await the release of the UK’s third quarter GDP figures due today at 9:30am with expectations the UK economy expanded by 0.4% which is only a third of the 1.2% growth recorded in Q2. It must be noted that a weak figure will increase the chances the BoE will opt for a new bout of QE at their next meeting in November which previously has considerably weakened sterling’s value.

The pound’s next key support level is at €1.1111 (£0.9000) if it falls through this level traders feel we could see the rate drop to the early year lows of €1.0928

The pounds losses against the euro pushed sterling’s trade weighted index down to 78.3, its lowest level since late May and within close reach of the May low of 77.8.

Yet sterling managed to make gains against a broadly weaker dollar ahead of the Fed’s meeting next week. Investors saw a group 20 agreement to shun competitive currency devaluations to increase exports as a go ahead to sell off the greenback with many economists believing we will see the Fed increase their asset buying to help an already struggling economy. The next question will be whether the Bank of England follows Americas lead, which is resulting with the pound underperforming against majority of the other currencies, especially after the BoE minutes last week showed one policymaker, Adam Posen vote for an extension of QE by £50 billion.

"The market is gunning for the dollar going into the Fed meeting, but it's not all good for sterling and the easiest way to express a bearish view on sterling is against the euro," said currency strategist at HSBC.

"The GDP data is the main focus for sterling this week and if it disappoints the market will factor in a higher probability of more QE".

Sterling reached a day’s high of $1.5771 up from the earlier session low of $1.5661.

The US saw better then expected home sales in September which rose by 10%, this is the 2nd month in a row the US has seen an increase to this figure yet it overall is still down -19% against sales recorded a year ago, but it does go some way to show the sector may be stabilising.

Reports circulating yesterday showed foreign-exchange strategists stating the worst may still be yet to come for the pound which has depreciated over 5% against nine other most traded currencies since July. This is mainly due to the new coalition governments spending cuts which will hamper growth moving forward.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates.   This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.

 

 

5th August 2010 Pension Foreign Exchange Report QROPS & QNUPS

Submitted by qrops on Thu, 05/Aug/2010

We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.  

Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory.  In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.    

The recent run of strong UK data has seen sterling make gains across the board over the last couple of weeks. Yet this run seemed to ground to a halt as the UK saw a weaker than expected reading of the UK services sector, it highlights the UK economy may struggle to match the growth it achieved in the first half of the year. The official reading grew in July at its slowest rate in 13 months achieving a reading of 53.1 from 54.4 in June.

The pound reached a day high of €1.2081 up from the low of €1.2041 against the euro.

Against the dollar sterling reached a session high of $1.5962 just down on the 6 month high of $1.5968 achieved on Tuesday but was still up for the session low of $1.5863. The dollar is still under broad selling pressure over the ongoing concerns of the US economy’s recovery especially after speculation we may see the Federal Reserve take further steps to try to lower borrowing costs. But many analysts believe there is a key resistance level at $1.5968 and we may see sterling struggle to push through that level into the $1.60’s.

The pound also found support from a rise in UK house prices which were up 0.6% in July and showing a recovery from the fall we saw in June. The recent reports from some of the major UK banks have all lifted sterling’s outlook with many banks reporting substantial profits on the half year; these banks include Lloyds, HSBC and Northern Rock. These are all positive signs for the UK as a country we are heavily reliant on the banking sector.

Elsewhere the US saw some positive non manufacturing data which came in at 54.3 higher then expectations of 53.8, this was followed by better than expected employment data which came in at 42k against the previous figure of 13k, this helped the dollar make gains against sterling in the afternoon session as it re traced some of its losses by 0.5%.

In the euro zone retail sales were released for both Month on month and Year on year for June. The reading came in lower at 0.0% against the last reading of 0.4% the Year on year figure fared better coming in at 0.4% against expectations of 0.1%.

All eyes will be on the Bank of England’s two day monetary policy meeting which started yesterday, today they will release their interest rate decision with many believing we will still see a hold of interest rates are the current record low of 0.5% (confirmed). What will be of interest is to whether any other policy makers agree with Andrew Sentence into voting for a rate increase to 0.75%.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates.   This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.

 

3rd August 2010 Pension Foreign Exchange Report QROPS & QNUPS

Submitted by qrops on Tue, 03/Aug/2010

We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.  

Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory.  In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.    

Sterling started the European session yesterday moving forward having made gains during Asian trading. Sterling’s trade weighted index against a basket of currencies hit an 11 month high, in particular a 6 month high against the US dollar and 1 month high against the euro.

Data compiled by the Bank of England that tracks the pounds value against a basket of currencies held by the UK's main trading partners rose to 82.7, the highest since September 2009.

The rise came mainly from broad based risk appetite as European shares soared after HSBC reported first half profits doubling to £7bn causing their share price to climb by 5.2%. Given the UK economy’s dependence on the financial services sector, any rise in this area was followed by with investor confidence. UK shares rose across the board by 2.5% with the pound following suit.

The pound rose as a many analysts are beginning to adjust their view on the UK economy. UK manufacturing expanded for the 10th consecutive month, despite being below last month’s figure of 57.6, the posted figure of 57.3 was better than expected.

British economic data has beaten economists’ expectations since April, according to an index of economic surprises compiled by Citigroup Inc.

By 5.00pm the pound was up 1.2% against the US dollar, hitting a high of $1.5904 from session open of $1.5722. Against the euro it rose to its highest since July 5th to €1.2110 at 12.30pm roughly 0.8% up from the open, before retracing gains to finish at €1.2050.

The euro made gains throughout the day against a broadly weaker dollar to rise to a high of $1.3190 the highest since May 3rd, breaking a key technical level around $1.3125.

The pound extended gains after it closed above its 200-day moving average around $1.5542 on Friday, while making a clear break to $1.5636. This 50% retracement of its peak-to-trough move between August 2009 and May this year.

Technical analysts said the pound's next target was $1.5970, the 61.8% retracement of the November 2009-May 2010 fall.

The pound’s value has a lot of negative news priced in and as the data releases improve, the bad news dries up, meaning there are less traders who strongly dislike the pound. The commodity Futures Trading Commission showed the number of wagers by hedge funds and other large speculators on a decline in the pound against the dollar had dropped significantly.

If the data releases continue to improve then the pound will appear cheaper and cheaper. The only potential fly in the ointment is whether the economy can weather the restrictive austerity plans the Government has put in place for the duration of this parliament.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates.   This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.

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