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 <?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 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.