Australia

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 pound had an impressive day against the euro progressively rising throughout the session, breaking through the €1.18 mark in the late afternoon and hitting a high of €1.1829 late in the US session, the highest since late February.
• GBPUSD saw a fall of around 0.6% to the day’s low of $1.5537 early in the session. The pound had a brief recovery peaking at a high of $1.5653 before settling down in the $1.5580 to $1.5600 range.
• British 10 year bond yields remained only 0.09% higher than the US T-bonds and just 0.04% above the German bund.
• The coalition government was fiercely split over David Cameron’s actions last week at the EU summit. Deputy Prime Minister and leader of the Lib Dems Nick Clegg was absent from yesterday’s parliamentary session.
• The PM maintained that he vetoed Britain’s acceptance to the terms presented in the summit because of ‘insufficient safeguards’. 
• This morning Core CPI figures show a decline, 3.2% from 3.4% last month and the more important measure of inflation, CPI fell to 4.8% from 5.0% month. Although still much higher than the target rate of 2.0% The Bank of England will be pleased to see the fall.

ELSEWHERE

• The euro suffered across the board as western markets digested the disappointment of last week’s EU summit which apparently did nothing to quell fears over the future of the trade zone.
• The disappointment was underlined through warnings issued by major ratings agencies to EU leaders that they had made insufficient ‘decisive policy measures to end the crisis and little to ease pressure’. 
• Moody’s added to the stresses on the Eurozone by adding eight of Spain’s banks and two Spanish holding companies on review for a possible credit rating downgrade. The ratings agency cited increased loss estimates from the commercial real estate market and weakening growth in the economy.
• Risk appetite took a hit as investors feared the worst and EUR/USD displayed a steady decline as investors. The pair opened at the session high of $1.3377 and closed at $1.3179, just off day lows of $1.3163.
• The USD’s performance was tracked closely by its fellow safe haven currency, JPY as expected under such risk driven market conditions. Both made significant gains against sterling in ahead of the European session in anticipation of the effect of Friday’s EU summit. The anxiety had subsided on both shores by 10am.
• Disappointing figures in the US Monthly Budget statement last night showed the excess of Federal outlays over receipts increased by almost $40bn from -$98.47bn to -$137.3bn
• Australia’s Trade Balance fell surprisingly to $1.595bn, well off the consensus of £2.0bn. Aussie Home Loans were up 0.7% against expectation of zero growth, GBPAUD reached a high of 1.5524 from a low of 1.5322.
• Japan’s Consumer Confidence figures for November were revealed lower than expected at 38.1, down from 38.6 the month before. Machine Tool Orders in November fell to 15.9% down from 26.0% the year before but in contrast, the Tertiary Industry index demonstrated a big boost in domestic services, up from -0.7% to 0.6%.
• This morning ZEW surveys in Germany and the Eurozone both show that Economic Sentiment has improved in December.

DATA TO LOOK OUT FOR (all times GMT) 

• Retail Sales figures are released at 1.00pm in the US, the markets are expected the results to remain similar to last month with Sales with Autos rising to 0.6% whilst the figure without falling to 0.5%.
• The US Fed Interest Rate Decision is a 7.15pm, it is highly unlikely there will be any change to the current 0.25% and therefore the results and accompanying report will have little effect on the markets.
• Overnight in Australia, Westpac Consumer Confidence figures are released for December, last month’ figure was 6.3%

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

• UK PMI Services data surprises the market coming in above consensus, the printed figure of 52.1 moved up from 51.3 last month.
• On a less positive note BRC ‘like-for-like’ sales decline to -1.6% (YoY) in November, the British Retail Consortium said consumers are keeping a tight rein on their spending, despite Christmas being so near.
• With high street sales falling, economists are concerned that the risks are great enough to push the UK economy back into recession.
• The pound had a mixed day against the dollar, initially seeing gains in the morning rising through the day to hit a high of $1.5708 before falling to $1.5636 during the US session.
• Against the euro, the pound had a relatively quiet day, progressively rising to hit a high of €1.1661 from a morning low of €1.1627.
• The UK housing market continued its bumpy ride as prices fell 0.9% between October and November, according to figures from the Halifax. There has now been an even split of monthly price rises and falls this year with five of each and one month of no change. House prices in the three months to November fell by 0.6% compared than in the preceding three months.

ELSEWHERE

• The euro started the morning well as investors decided to take a ‘risk on’ stance because headway was made in negotiations over the Eurozone debt crisis, EURUSD rose to $1.3482
• German Chancellor Merkel and President Sarkosy have agreed to restructure the way private sector involvement in Eurozone debt is handled and announced a plan to keep a tighter rein on member state’s finances to avoid spiralling debt issues in the future.
• The European Stability Mechanism (ESM) plans have been moved forward, the fund should be in place by the end of 2012, 6 months early than previously expected.
• The plans will be put to vote at the European Union meeting in Brussels at the end of this week and hopefully will pave the way to finalising the crisis without a breakdown in the euro.
• Italian Prime Minister Mario Monti announces a €30bn austerity package plan to cut debt. The markets responded positively to the announcement, Italian 10 bond yields fell below 6% for the first time since October.  
• Despite the positive start to the day, risk aversion was given a big knock in the afternoon as credit ratings agency S&P put 15 countries within the Eurozone on CreditWatch, this includes all Triple A rated nations and caused EURUSD to lose the mornings gains and finish at $1.3382. German and France despite leading the way on the negotiations were included and have been given a 50/50 chance of being downgraded within 90 days.
• The first of the Central Bank interest rates decisions this week was published overnight with Australia cutting interest rates by 0.25% to bring them down to 4.25%, the move was largely expected and has no significant effects.  

DATA TO LOOK OUT FOR (all times GMT)

• Eurozone Q3 GDP figures are released at 10.00, this is the final print and the markets are expecting the figure to remain at 0.2% as seen in the previous release.
• At 11.00am German Factory Orders are published, after a disappointing -4.3% released in September, analysts are expecting a much better 1.0% for November.
• Building permits are released in Canada at 1.30pm
• The Bank of Canada decide on their interest rates at 2.00pm, they are expected to remain on hold at 1.0%
• Again in Canada at 3000pm is the Ivey Purchasing Managers Index for November will gives an indication of business condition in Canada.

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.