America

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

• UK house prices fell by 3.1% in November, the biggest decrease since November 2010 and caused the pound to fall against the dollar for the first time in 3 days, dropping 1% from the session high of $1.5775 to end the day’s trading near the low of $1.5612 a fresh months low.
• <?xml:namespace prefix = st1 />Sterling falls from €1.1683 against the euro to end the session near the low of €1.1572.
• UK Prime Minister David Cameron said his government will unveil a ‘massive’ credit-easing program to stimulate the ailing economy, and pledged to ‘use the strength of the government’s balance sheet to pump billions of pounds into reducing the cost of loans for small and medium sized businesses’ as the region faces an increased risk of a double-dip recession
• UK stocks drop for the 6th day yesterday amid signs US lawmakers will fail to agree on budget cuts, raising the prospect America will face another credit rating downgrade.
• This morning the pound rises from a 6 week low against the dollar before a government report that economists said will show Britain’s budget deficit narrowed in October. 

ELSEWHERE

• The Bundesbank warned of a ‘pronounced’ slowdown in the Eurozone as the central bank sees Europe’s largest economy growing 0.5% - 1.0% next year versus an initial forecasts for a 1.8% expansion in GDP, and the slowing recovery may prompt the European Central Bank to carry its easing cycle into 2012 as the region struggles to contain the sovereign debt crisis.
• The new Greek government has submitted its plans for next year's budget, promising to almost halve the deficit. Finance Minister Evangelos Venizelos predicted the deficit would fall from 9% of GDP this year to 5.4% in 2012 due to a write-off of debt held by banks.
• In late afternoon trade the euro erased early gains against the dollar and ended trade near the day’s high of 1.3537.
• US Home Sales increased to 4.97M in October and came in above market expectations.
• Japan's exports have fallen for the first time in three months, reinforcing worries that the strong yen and global debt crisis are affecting the economy.
• The Yen and US dollar rally yesterday after bets increase that US lawmakers will announce that the ‘Super Committee’ failed to agree on deficit cuts, boosting demand for safe haven currencies. This ‘risk off’ attitude has caused the Australian dollar to fall to a new five week low on reduced demand, whilst the Canadian dollar falls to its lowest level in 6 weeks against the US dollar.
• On a positive note for the US Moody’s affirmed the US’s AAA credit rating but maintained its negative outlook. 

DATA TO LOOK OUT FOR (all times GMT)

• Today the UK releases Public sector Net borrowing at 9:30am.
• Canada releases Retail sales at 13:30pm which is expected to show no changed from the previous release.
• The US GDP annualized is also released at 13:30pm these are expected to be revised down to 2.5% from 3.3% which could send investors further towards safe haven assets.
• The European Monetary Union releases Octobers Consumer Confidence which is expected to fall further to -20.
• The US also releases its November FOMC minutes at 7pm. 

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).

Tuesday saw the euro fall across the board, as weak German and euro-zone growth data

sparked concerns about a potential slowdown, damping risk appetite and boosting demand

for the safe-haven Swiss franc, yen and dollar.

Data showed Germany’s gross domestic product (GDP) growth slowed to 0.1% in the

second quarter, which was way below forecasts of 0.5%. On release of this, the euro

was pushed down more than 1% against the Swiss franc.

The euro zone’s GDP data showed the region’s economy grew by just 0.2% over the

same period, adding to pessimism over the currency block, already struggling with a

sovereign debt crisis which is only escalating. These concerns are likely to make investors

rather wary of the euro in the coming days.

The leaders of France, President Nicolas Sarkozy and Germany, Chancellor Angela Merkel,

were under pressure to show financial markets they are in agreement on doing more to

shore up the embattled currency union, or risk watching the euro zone unravel.

They had previously planned to meet this week to push ahead on their July 21 pledge to

come up with new proposals on euro zone economic governance, but the stakes were raised

when France was slammed in last week’s global market rout.

In early New York trading, the euro was down 0.4% versus the dollar at $1,43830,

with support around the $1.43511 level.

The pound pared losses against the US dollar, easing off the daily low after stronger than

expected UK inflation data prompted Mervyn King, the Bank of England Governor, to say the

central bank could raise rates to bring down inflation.

The UK Office for National Statistics said earlier that the rate of consumer price inflation

accelerated to 4.4% in July from 4.2% in June, above expectations for a 4.3% increase.

Core CPI, which excludes food, energy, alcohol and tobacco costs increased by a seasonally

adjusted 3.1% in July, broadly in line with expectations and up from 2.8% in June.

Over in the United States, the number of building permits issued fell more than expected in

July, official data showed.

In a report, the US Census Bureau said the number of building permits issued in July fell

3.2% to a seasonally adjusted 0.60 million, down from 0.62 million in June. Analysts had

expected a decline of 1.9% to 0.61 million in July.

US Housing starts also fell 1.5% in July to hit a seasonally adjusted 0.60 million, broadly in

line with expectations.

IN THE UK

• UK Consumer Price Index accelerates to 4.4% in July, up from 4.2% in June and beats expectations for a 4.3% increase.
• Bank of England Governor, Mervyn King, hints at potential hike in rates to curb inflation and didn’t rule out further QE.
• GBP/EUR hits a low of 1.1331 and a high of 1.1411 and GBP/USD hits a low of 1.6322 and a high of 1.6430

ELSEWHERE

• Euro falls across the board on the back of weak German and Eurozone growth data, sparking concerns about a slowdown and damping risk appetite
• Germany’s GDP growth slows to 0.1 percent in the second quarter, less than a forecasted 0.5 percent.
• GDP data from the euro zone showed the region’s economy grew by a mere 0.2 percent over the same period (second quarter).
• US Housing starts fell 1.5% in July to hit a seasonally adjusted 0.60 million, in line with expectations
• US building permits fell more than expected in July, by 3.2% to an adjusted 0.60 million, down from 0.62 million in June. Forecasts were for a decline of 1.9 percent to 0.61 million.
• In Australia, minutes of the RBA’s meeting on the 2nd August, showed that policy makers extended a pause on interest rates due to global growth concerns.
• Chancellor Merkel and President Sarkozy call for ‘true economic governance’ after their meeting to help combat the spiraling debt in the Eurozone.

DATA TO LOOK OUT FOR 

• All eyes on the UK and Bank of England minutes, due out at 09.30am. Will there be more policy makers in favour of either a rate hike or further QE, after CPI figures yesterday showed an increase to 4.4%.
• Also out at this time, is the UK Jobless Claims Change. Have unemployment benefits jumped or will it show UK labour market is gaining strength??
• 10.00am we will be open to the Core CPI figure from the Euro zone, expected to come out at 2.5%, still above their target level of 2%
• Over in America, at 1330pm, we will see the release of the July Producer Price Index, an early indication of inflation, as this measures the changes in the selling prices, producers charge for goods and services.

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 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).

Sterling strengthened yesterday after figures showed a surprise increase in services

sector that could point towards first quarter growth for the UK economy. UK PMI

services came out at 9.30am which showed crucial services sector soared to a 13

month high of 57.1 in March, its fastest pace of growth in over a year and beating

even the most optimistic analysts forecast.

The strength of first quarter GDP is seen by most economists as the key to whether

the Bank of England raises interest rates in May from the historic low of 0.5%. This

news prompted buying of the pound helping sterling to jump a cent against the dollar

to $1.6240. It also shot up over a cent higher against the euro to €1.1460, before

spending most to the day trading around the €1.1450 level.

It was a busy day across the pond in America with the release of ISM nonmanufacturing

for March which registered 57.3% in March, 2.4% lower than February’s figure. Overall 16 industries grew during March, while the report highlights

the growth experienced in the sector, it also stated the red hot expansion in the

industry could be slowing.

Later in the evening last night we had the release of the FOMC minutes which helped

gold hit a new high due to the deteriorating US debt conditions. According to the

minutes of the Match meeting committee members agreed that no change to the

asset purchase program, or its keep benchmark interest rate were necessary. The

general decision reached was that the economic recovery continued to progress,

while overall conditions in the labour market continued improving.

Following the release of the minutes the dollar rose across the board, in particular

against the Yen. USD/JPY hit its highest level since September 2010.

IN THE UK

• UK PMI Services surprised even most optimistic analyst’s predictions, rising to a 13 month high, will help towards 1^st quarter growth.
• Pound rises to $1.6240 and €1.1460 after the data, but markets feel the data is unlikely to affect tomorrow’s interest rate decision
• Overnight Halifax house prices show prices rose by only 0.1% in March, lower than  expected by still a step in the right direction
• This morning Manufacturing and Industrial Production fall in Feb and both have a negative effect on sterling. 

ELSEWHERE

• Focus remains on ECB rate decision tomorrow, most expect 25bps hike but comments at press conference will be key.
• Euro strengthens against USD, breaking 1.43 level as weak ISM Non-Manufacturing hold dollar back.
• China raise rates by 25bps, 4^th time in 8 months, a trend is emerging for a hike every other month
• Fed minutes released last night show a range of views amongst members, unlikely to see any change in policy in short term 

DATA TO LOOK OUT FOR

• This morning sees the final print of Q4 GDP for the Eurozone, could potentially see a slight rise which could help the euro
• Important Portuguese bond auction held today, results available at 10.30. If successful could push their bailout needs back slightly.
• Fed Member Lockhart speaks this afternoon, interesting to see his comments after minutes last night.
• 2.00pm Canadian Ivey Purchase Managers Index  

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.