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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

• On Friday, GBP/EUR reached a high of €1.1993 but closed at the session low of €1.1890. Nearly two cents below last week’s close of €1.20755.
• Against the US dollar, sterling shed almost 0.5% in the afternoon but the pair bounced off the 1.5640 resistance level to touch a high of 1.5740 in late evening trade.
• GBP/AUD rose sharply from the day’s low of 1.4710 to the high of 1.4811 in the middle of the day.
• Prime Minister Cameron is attending the European Leaders’ summit today, his first meeting with European leaders since having vetoed treaty changes in December. His objectives are to protect the single market stating, “we want them to get their economies sorted out because that's causing us problems over here”. 
• Sterling continued its losing streak against the Indian Rupee touching it’s lowest since October 2011 at 77.1530. 

ELSEWHERE

• This week the spotlight is on the EU leaders’ summit which begins today and seeks to finalise operational details of the new fiscal compact by firstly institutionalising budget discipline in the region and secondly to reach an agreement on private-sector involvement (PSI) in the second Greek bailout which has now increased to $145bn.
• Market stakeholders will be looking for a speedy and practical implementation plan as well as a strict policy on offenders. However German 10 year bonds and European stocks have already fallen in anticipation of yet another failure to reach a viable conclusion.
• Spanish GDP contracted 0.3% in Q4 last year, indicating the economy’s approach toward the second recession since 2009 and also highlights the lack of effect government efforts have turning the situation around.
• Nicolas Sarkosy has stated his plans for a France-only 0.1% tax on financial transactions to be initiated in August. EU finance ministers are due to discuss a Europe wide levy in March although unlike the French proposal this is not intended to affect the bond market.
• Euro had made gains against US dollar on Friday, after opening at $1.3092 the pair had gained around 0.5% by lunchtime and rose a further 0.3% in the afternoon to post a 6 week high of $1.3225.
• The US had some disappointing data releases, the biggest surprise was the annualised US GDP for Q4 2011. The figure of 2.8% fell short of consensus by 0.2% but still made significant improvements on the previous figure of 1.8%.
• In addition, the consensus on US Real Personal Consumption Expenditures was shown to be too optimistic as the actual figure of 0.1% fell short of projections by 2.2%.
• The dollar’s only redemption was in the form of January’s Consumer Sentiment Index from Michigan, coming in at 75 it beat expectations by 1.1 and December’s release by 5.1.

DATA TO LOOK OUT FOR (all times GMT)

• Germany, releases CPI figures for January today. Expectations are for inflation to have fallen by 0.1% to 2.0%
• The US publish Personal Consumption Expenditure figures at 1:30pm today, all components are expected to remain fairly similar to last month’s figures.
• German retail sales however are pitched to be up 1.8% on December which will be a solid indicator of positive consumer sentiment if it materialises.
• Italy is trying to auctions as much as €6bn of five- and 10-year bonds today.
• Japan also has a variety of data out today, the most significant being unemployment figures for December. Whilst the consensus predicts no change from November’s 4.5, it is important to note that the figure was 5.10 just 12 months ago. 

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 <?xml:namespace prefix = st1 />UK

• Producer Price Index figures on Friday morning in the UK showed a fall in prices that manufacturers buy and sell at. The pound was left mainly unaffected after the announcement but values fluctuated later on as overseas developments took place.
• During the course of the day the pound made gains versus against the euro as rumours circulated trading floors that several Eurozone nations would be downgraded, GBPEUR rallied back through the psychological €1.20 mark to hit a high of €1.2091 late in the evening.
• GBPUSD didn’t fare so well, falling to a 18 month low of $1.5234 tracking a fall in EURUSD as concerned investors head to the reassurance of the safe haven currencies.     
• George Osbourne will sign a deal today with Hong Kong to help the City of London become a offshore trading centre for the Chinese Renminbi.

ELSEWHERE

• The main news last week was S&P’s decision on Friday to downgrade the credit ratings of 9 Eurozone member states, the most notable of these were France and Austria being downgraded from the top tier AAA rating.
• Concerns now surround the European Financial Stability Facility as France and Austria’s downgrade mean the fund could lose its own AAA rating and potentially  €180bn of lending capacity.  
• Sentiment over Europe had started to improve last week and bond auctions went well, EURUSD had risen sharply to a high of $1.2874 before losing over 2 cents to fall to $1.26342 ahead of the S&P announcement.
• Adding to Eurozone woes were threats of a Greek default increased after talks to restructure the country’s debt broke down. Negotiations failed over the size of the haircut to be taken by banks.
• Following the French downgrade, EURJPY hit a fresh 11 year low of 97.15yen, the euro under obvious pressure and yen benefiting from it’s safe haven status being both contributing factors.  
• In the US, some of the optimism about housing, consumer spending and the broader economy eased back a bit last week, amid a splattering of weaker economic reports. Retail sales rose just 0.1% in December and core retail sales fell by the same amount. Holiday sales came in right in line with expectations, rising 5.1%.
• US weekly first-time jobless claims spiked up to 399,000 and job openings listed in the JOLTs survey fell slightly..
• Former MoF official Sakakibara (aka Mr. Yen) expects that Japan could be downgraded soon; Strong Yen is likely to continue, however any intervention in the market would most likely be unsuccessful without the help of the US.

DATA TO LOOK OUT FOR (all times GMT)

• A relatively quiet day for data today, markets will be accessing the fallout from Friday European downgrades and how they will affect the Eurozone crisis.
• Eurozone President Draghi speaks this evening at a press conferences with Q&A, he will undoubtedly face many questions about the severity of the downgrades and how they affect the EFSF.  
• Business Confidence Figures are released in New Zealand tonight at 9.00pm

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).

Improved U.S. jobs numbers gave world stocks some relief in an eighth straight session of

losses on Friday which had wiped almost $2.5 trillion off values on the week and brought

back memories of the 2008 crisis. The U.S. Labour Department said payrolls increased

117,000 and the unemployment rate dipped to 9.1% from 9.2% in June. A

Reuters survey ahead of the report showed expectations for a rise of 85,000 with the

unemployment rate at 9.2%.

There remained widespread demand for policymakers to beef up plans to tackle the

Eurozone's crisis and prevent the U.S. economy in particular from sliding back into recession.

Global equities were down 1% on the day for a more than 8% loss this week.

Emerging market shares stumbled 3% on the day.

Apart from signs that the U.S. and global economy are weakening -- despite record low

interest rates and the pumping of liquidity into the system -- the focus was clearly on

Europe, where bond yields in Spain and Italy have been blowing out, threatening the same

kind of refinancing problems that have already smitten Greece, Ireland and Portugal.

The European Central Bank disappointed investors on Thursday by buying Irish and

Portuguese bonds but not Italian or Spanish. Italy has emerged as the market's major

concern after a rescue deal that was intended to stop the spread of the crisis failed to

convince investors it had the firepower to ease pressure on the vast Italian bond market.

The Swiss franc -- which the Swiss central bank has tried to weaken this week -- hovered

near record highs against the euro and dollar, while the yen rose. Both are considered safe

haven currencies. The franc rose to a record high against the euro of 1.0710 francs in early

Asian trade but retreated to 1.0863 in European dealing on fears of official action to weaken

the currency.

Sterling hovered near a two-month high against the euro on Friday at 1.1537, supported by

concerns that the Eurozone's debt problems may overwhelm two of its larger economies.

Sterling was also up 0.2% on the day at $1.6297, finding its footing after falling 1.0% the previous day when the dollar rallied broadly on the back of intervention by Japanese authorities to sell the yen.

Analysts said sterling could come under selling pressure next week if the Bank of England cuts its growth

forecast in its quarterly inflation report, which some said could call sterling's recent

perception as a "safe-haven" currency into question

Gold held firm on Friday after upbeat U.S labour market data soothed immediate fears of a

recession, but longer-term uncertainty about economic growth and concerns about the euro

zone debt crisis supported demand for the precious metal.

Spot gold was bid at $1,658.79 a troy ounce by 1322 GMT, from $1,647,90 an ounce late in

New York on Thursday when it hit a record high of $1,681.67. A weak dollar makes gold

cheaper for holders of other currencies and with few other places to go, the metal still looks

attractive to those investors trying to maintain the value of their capital.

IN THE UK

• FTSE 100 slumps to worst week in nearly three years on growth woes
• Sterling hovered near a two month high against the euro on Friday, supported by concerns that the Eurozone’s debt problems may overwhelm two of its larger economies.
• RBS shares shed 6.9% after the part-nationalised lender posted a pre-tax loss of £678mn pounds in the second quarter.
• Sterling was up 0.2% against the dollar on Friday at $1.6297, finding its footing after falling 1.0% the previous day when the dollar rallied broadly on the back of intervention by Japanese authorities to sell the yen.
• Data from mortgage lender Halifax showed UK house prices rose in July, but also indicated that the housing market was unlikely to improve further through the end of the year.
• Analysts said sterling could come under selling pressure this week if the Bank of England cuts its growth forecast in its quarterly inflation report.

ELSEWHERE

• European shares open lower continuing their two week slide after S&P cut the US prized AAA credit rating by one notch.
• Nikkei slides over 2% on US downgrade
• On Friday US jobs data beats expectation but growth woes linger
• Over the weekend The European Central Bank steps in to buy Spanish and Italian debt bonds, this morning that has seen the spread between Spanish/Italian and German Bond yields drop by over 100 bps showing the intervention is working thus far. 7% is seen as the critical level and currently Spain and Italy seen theirs back in the late 4/early 5’s.
• The US dollar struggles this morning after the weekend’s decision by Standard and Poor’s to drop the US’s credit rating. The move had been warned and many felt it came as no surprise but this morning EUR/USD has broken $1.44 again and GBP/USD sits near 2 month highs.
• US treasury’s Tim Geithner hits out at S&P saying the decision showed “stunning lack of knowledge of US fiscal budget math' and terrible judgement
• Gold hits the lofty heights of 1716, demand for the higher yielding currencies continues to fall, GBPUSD now up at 1.58 (10 cents in a week) and NZD is dropping too

DATA TO LOOK OUT FOR

• Pretty quiet day in terms of data releases today includes Sentix Investor Confidence in the Eurozone, a fall is expected as conditions dry up amidst the recent down turn in activity and debt problems.
• UK RICS Housing price balance (Jul) released tonight, expected consensus -25 slightly better than the previously released -27
• Japan Money Supply M2+CD (YoY) (Jul) consensus view 2.9%
• BOJ Monetary Policy Meeting Minutes
• No data from the US today although the US will remain in the spotlight after S&P announcement over the weekend. Keep an eye out for any news from the other ratings agencies and tomorrow’s Fed meeting.

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.