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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).

N THE UK

·         Policy makers in the UK have been accused of not doing enough to promote competition in banking and nurture alternative sources of finance for small businesses.  As rates remain low and inflation is likely to continue to slow BoE Policy maker Adam Posen has pointed the finger saying that banks and policy makers are still risk averse and reluctant.

·         UK Purchasing Managers Index suggested a slight improvement in manufacturing, posting a figure of 52.1 versus expectations of 50.1 which resulted in GBP capitalising on a move higher against the dollar to $1.5857 and recovering back above €1.20 against the euro.

·         Having broken through a level of resistance at $1.5770 the pound moved to its highest level against the greenback since November of 2011.  Focus remains to the upside despite short term risk of a slight correction lower.

·         GBP/JPY is considered to have found a floor following a drop off in sterling during the month of January; the battle between these two safe havens seems to have changed direction and traders feel the pounds attack on key resistance level of 121 could pave the way for further gains. 

ELSEWHERE

·         Despite coming under increased pressure to join the bond swap being negotiated with Greece, the ECB remains coy over how it will help the country cut its debt burden. The Greek Government has until 20th March to reach a deal and release the second EU bailout.

·         Polish Finance Minister Jan Vincent Rostowski argues that factors such as the absorption of EU structural funds and recent measures undertaken by the ECB have stabilised conditions in the European environment; a feint voice against stiff criticism of German and French leaders.

·         All major currencies are trading higher against USD following better than expected PMI figures from China and Europe and the lower than expected figures for US ADP non-farm employment and PMI.

·         Switzerland posted retail sales a percent below expectations of 1.6%, but December saw a 21% rise in exports. Despite the offsetting effect of this information CHF lost value against GBP, EUR , USD and AUD and this morning’s worse than expected trade balance of 2.07B leaves the Franc open to further movement lower.

·         Australia posted a favourable trade balance (surplus) at $1.71B, exceeding expectations of 1.22B and bringing GBP/AUD and EUR/AUD to 1.4754 and 1.2280 respectively on the back of a boom in mining exports.

·         Japan posted a 15% figure for its year on year monetary base.  The Japanese bought the highest number of foreign bonds since September in the week ending 27th January, suggesting the BoJ are keen to hedge  against the risk of global inflation.

DATA TO LOOK OUT FOR (all times GMT)

·         Construction data for the UK is released later this morning, and the markets will be looking to asses comments expected from MPC member Posen at approximately 2.00pm.

·         US unemployment figures, forecasted for 373k, will be complimented by testimony from Fed Chairman Bernanke.

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

• 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.