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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 UK

• British Prime Minister David Cameron says that Britain will not ratify the Franco-German proposals to change the EU Treaty without safeguards for British interests and The City of London. 
• Following yesterday’s announcement that S&P have placed a further 15 of the 17 Eurozone states on a negative watch, including France and Germany, GBP/EUR moved to a rate of €1.1711. 
• In the lead up to the open of the European markets GBP/EUR trades at €1.1627 arguably on the back of support for planned changes to the EU Treaty for the United States.
• The British Retail Consortium indicate the early advent of sales on the British high street has contributed to a contraction in the pace of retail inflation.  Whilst Food price inflation remains on the up, other retail items saw a contraction by 0.1% to 2% for previous 2.1% posting.
• Josh Raymond of City Index asserts that major currency trading will remain largely headline driven until sentiment from Friday’s EU summit and minutes from BoE can be assessed fully.  GBP will benefit from a more or less coordinated effort to lower rates around the world coupled with protection of Britain’s AAA rating. 

ELSEWHERE

• The European Financial Stability Fund (EFSF) has also come under scrutiny from ratings agency Standard and Poor’s, who have warned that it could downgrade the AAA rating of the fund.
• Timothy Geithner, US Secretary of the Treasury, spoke yesterday of an emphasis on the importance of success in the EU talks, not only for the EU and US, but for the Global economy as a whole; overnight USD moved to a rate of $1.34 against EUR, but has slipped back to $1.343 following the European open.
• Analysts in Asia have warned of the immediate risk of contagion globally, and as a result many Asian economies have ‘trimmed’ their growth forecasts, but the area itself does see the potential for medium term growth on the back of an increase in demand with closure of a percentage of European export markets.
• Dutch heads of business have come out to urge EU political leaders to push forward urgently.  With over one third of their exports going to Southern European countries, fears voiced by The Netherlands place greater pressure on EU heads of state to satisfy the markets’ appetite for stability in the Eurozone.
• This morning the Secretary General of OPEC, speaking in Doha, said that he hoped the EU would not go ahead with a proposed ban on Iranian oil.  At present Iran supplies the EU with around 18% of its oil, or 450k barrels a day, and the Secretary General warns that this amount would be very hard to replace if sanctions come into place.
• Australia posts GDP figures in line with expectation at 1%, but below the 1.4% growth shown last quarter.  GBP/AUD moves from a rate of 1.5228 to 1.5182, and marginal risk appetite comes back to certain Far Eastern currencies; SGD strengthens against GBP slightly. 

DATA TO LOOK OUT FOR (all times GMT) 

• 11.00am German Industrial Production figures are released.
• MBA Mortgage Applications is released at 12.00pm in the US
• In New Zealand at 8.00pm, the RBNZ release their interest rate decision. The markets aren’t expecting any change to the current 2.5%
• Japanese Trade Balance is released overnight.

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

• Manufacturing production in the UK rose more than expected in September, rising for the first time in three months, official data showed. It showed to have risen by 0.2% in September, slightly higher than forecasts for a 0.1% rise.
• UK RICS house price balance came in at -24 versus -23 in September and beat expectations of -23, showing an increase in the number of houses sold, potentially sparking some growing realism among sellers as they are more willing to take offers to secure sales.
• Sterling managed to jump to a high of 1.1689 against the euro yesterday and 1.6119 against the US dollar.

ELSEWHERE

• All eyes on Europe yesterday, Italian Prime Minister Silvio Berlusconi failed to win an absolute majority and has agreed to resign, although this will be delayed until after the approval of the austerity plans which is scheduled for November 15.
• This news is alongside recent activity over in Greece which is expected to see the resignation of Prime Minister George Papandreou and the announcement of a new coalition government. Such rapid political changes will surely increase uncertainty over whether the euro area leadership will continue to foster enough of a consensus to keep muddling through the sovereign crisis.
• A quiet day yesterday in America saw the USD under modest pressure, especially against the JPY.
• EUR/USD hit a high of 1.3846 and a low of 1.3724. Risk certainly seems to be switched “on” in spite of the considerable uncertainty in Europe. The FX market and the S&P currently both suggest that the market is actually responding and trading in a very risk positive way, although this can be derailed by risk negative news.
• In Canada, housing starts fell less than expected in October, coming out at 208,000 units in October, beating expectation for a decline to 200,000 units. 

DATA TO LOOK OUT FOR (all times GMT)

• 1.30pm will see the CAD NHPI, which measures the housing industry’s health. Will it show a rising house price which in turn attracts investors and spur industry activity…??
• 1530pm, Ben Bernanke is making a speech on Small Businesses. Will he give a hawkish tone, is the question traders want to know.
• Crude Oil Inventories due out at 3.30pm in the US. This influences the price of petroleum products which affects inflation but also impacts growth as many industries rely on oil to produce goods.
• 9.30pm  New Zealand will have its RBNZ Financial Stability Report, which will provide insights into the banks’ view of inflation, growth and other economic conditions that will affect interest rates in the future.

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).

With the state of Eurozone periphery finances and US finances coming under such intense

scrutiny, the UK continues to look like a safe harbour for international capital.

All eyes yesterday, were on the Bank of England monetary policy meeting. There was no

surprise, however, as rates remained on hold and the size of the asset purchase programme

was maintained at £200bn. This interest rate is likely to be remained unchanged at 0.5% for the rest of the year.

Eyes and ears will now be awaiting the release of the minutes of this meeting on the 17th

August. Adam Posen has been the only member in the committee to seek additional bond

purchases over the last few meetings and with all the speculation recently it will be

interesting to see if there were any additional votes.

Over in Europe, the European Central Bank also left its benchmark interest rate unchanged

amid heightened tensions in the euro area that have causes many analysts to question the

validity of policy moves made by the bank earlier this year. The ECB has raised its main rate

in two steps since April, from 1% to 1.5%, aiming to head off rising inflation,

which is well above their official target of about 2% but many economists argue that,

excluding commodities such as oil, price pressures remain benign. Meanwhile, growth in

countries like Spain, Ireland and Italy remains very weak.

Analysts expect the ECB to raise rates for the 17-nation euro area again at the end of this

year or early next year, after Mr Trichet retires at the end of October and hands the

presidency to Mario Draghi, governor of the bank of Italy.

European leaders decided last month to authorize the European Financial Stability Facility to

buy bonds in open markets, relieving the ECB of that responsibility, although it’ll take

months before the EFSF is able to start making purchases.

At a news conference, Jean Claude Trichet said the bank’s bond-buying programme, which

had been inactive since March, was still operational.

“I never said myself that it was dormant,” Trichet said, adding that weekly ECB bond buying

data would show what actions had been taken by the central bank, “It is an ongoing

programme and we are totally transparent.”

The central bank came under pressure to act following a sharp escalation of the debt crisis in

recent weeks. Italy has seen its bond yields soar, which has alarmed policy makers since

bank exposure to its debt dwarfs that of the countries already bailed out; Greece, Ireland

and Portugal.

Across the seas in the USA, official data from the US Department of Labour, showed the

number of people who filed for unemployment assistance fell unexpectedly by 1K to a

seasonally adjusted 400,000, confounding expectations for an increase to 406,000.

Following the release of the data, the US dollar was up against the euro, slumping to a low of

1.4110. However, US stock index futures were unchanged following the data.

IN THE UK

• All eyes were on UK interest rate decision yesterday lunchtime, which remained unchanged at 0.5%. The asset purchase programme also remained unchanged at £200 billion.
• The pound hit a high of $1.6438 against the dollar and €1.1552 against the euro. This is the first time for over two months GBP/EUR has breached the €1.15 level.
• UK is said to miss its forecast 1.7 percent growth, as per the head of the country’s fiscal watchdog.
• Dire conditions in the UK stock markets force the FTSE to fall 3.5% as equity values tumble and open another 3% lower this morning.
• This morning the various UK PPI figures all came in largely as expected, this has made little if any difference to the pound

ELSEWHERE

• The European Central Bank keeps interest rates on hold at 1.5% but Jean Claude Trichet signals possible hikes by the end of the year, this bullish attitude to interest rates is helping the ECB lose fans all over the world as it seems cavalier to even suggest raising rates when countries such as Italy and Spain are on the brink of falling to meet their debt expectations.
• EURUSD fell further after the beginning of the US session and bottomed at $1.4110. The euro weakened amid risk aversion and following Jean-Claude Trichet’s press conference and fell across the board.
• US initial jobless claims fall unexpectedly in a report by the US Labour Department. This was adjusted to 400,000, less than expectations of a rise to 406,000, attention turns to the US Non Farm Payrolls released this afternoon.
• Stock Markets posts negative figures all over the world as fears rise of a global recession, not one of the major markets reported a rise.
• The RBA slashes its growth forecast for Australia from 3.25% to 2% and this helped to weaken the AUD, GBP has gained nearly 2 cents from yesterday meaning nearly 8 cents this week in gains.
• Yesterday’s currency intervention from the SNB and BOJ to reduce the value of the respective currencies seems to have lost momentum, GBP/CHF and GBP/JPY are both showing declines this morning and both currencies made gains against the USD

DATA TO LOOK OUT FOR

• Both YoY and MoM German Industrial Production out at 11.00am. Expected to come out at 8.1% and 0.0% respectively.
• The Canadian Unemployment rate is due out at 12.00pm, which is forecasted to read 7.4%, so very interesting to see how this actually reads.
• Main data today is at 1.30pm when US Unemployment rate and Non-farm Payrolls for July are released. NFP posted a terrible figure last month and is expected to rise significantly today. The US dollar will remain volatile in all pairs if the figure fails to meet expectations of approximately 91k
• Finally we have USD Consumer Credit out at 8.00pm this evening.

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.