European central bank

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

• After yesterday morning being dominated by high and medium tier data, today sees only one release from the UK in the form of our CBI Realised sales figures, which shows the sales volume for the month and is forecast to show a slowdown in consumer buying.
• Yesterday saw erratic price movement as GBP/USD moved between the prices of $1.5618 and $1.5529, however overnight saw a volatile jump as cable breached the $1.56 level and posted a high of $1.5677, finding support around the $1.5650 level and resistance of the physiological level of $1.57.
• Yesterday saw the release of the UK MPC meeting minutes, the MPC voted 9 to nil in favour of keeping the asset purchasing program on hold, despite some other data in the month that pointed towards growth. There were comments in the minutes that suggest the door is still open for further QE, however not until the remainder of the program has been completed.
• UK Preliminary GDP for Q4 last year was released yesterday and showed that the UK economy slowed and contracted by -0.2% against the forecast -0.1% as the UK experiences the slowest recovery from a recession since the 1930’s. Fuelling speculation that the UK could be heading towards a double dip recession, so eyes will be firmly on economic data being released. Remembering, two consecutive negative GDP quarter readings mean that the nation is in a recession once more. 

ELSEWHERE

• Yesterday evening the FOMC statement released their statement which fuelled volatile trading as the Fed, left the door wide open for ultra-loose monetary policy for at least the next three years, releasing comments such as “monetary policy will remain highly accommodative” signalling that they are open to further their asset purchasing program. They also predicted that the interest rates for the nation will remain low until 2014 and set a formal inflation objective target as 2%, previous prediction for interest rates was that they would remain low until mid 2013, so the window is widening. 
• On release of the FOMC statement EUR/USD climbed over 1 cent and GBP/USD held a rally of just under a cent, as investor confidence in the dollar suffered, however this news is positive for equities and investors. This could suggest that the market was not expecting the openness of the FED to fire up the printing presses once more in a bid to support the economy.
• The euro gains against the USD however could be limited if Mario Draghi, European Central Bank president, were to make further comments about the ECB’s own commitment to low interest rates. There are views in the market place that the ECB could cut interest rates by a further 50 basis points in the coming months.
• US Pending Home Sales data released yesterday missed expectations massively, posting a figure of -3.5% against a forecast reading of -0.6% showing that the number of pending sales contracts on homes are slowing down in the nation.
• The Japanese Yen weakened against all major currencies yesterday due to weaker Japanese data and stronger risk appetite. Japans first annual trade deficit in more than 30 years asks the question how long can the nation rely on its exports to help finance its huge public debt, without the need to turn to foreign investors.
• The Reserve Bank of New Zealand, decides to keep rates on hold at 2.50%.

DATA TO LOOK OUT FOR (all times GMT)

• German Consumer Confidence figure released this morning shows better than expected results posting a figure of 5.9 against an expected 5.6.
• US Core Durable Goods month on month figures are released today expecting to post a gain of 0.9%.
• US Unemployment Claims are being released today at 13.30pm expecting to post a figure of 371K.
• New Home Sales in the US being released at 3pm to show a slight increase from last month’s figure of 315k to 321k. 
• Inflationary data being released overnight from Japan both of which are expected to show declines. 

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 house prices fell by 3.1% in November, the biggest decrease since November 2010 and caused the pound to fall against the dollar for the first time in 3 days, dropping 1% from the session high of $1.5775 to end the day’s trading near the low of $1.5612 a fresh months low.
• <?xml:namespace prefix = st1 />Sterling falls from €1.1683 against the euro to end the session near the low of €1.1572.
• UK Prime Minister David Cameron said his government will unveil a ‘massive’ credit-easing program to stimulate the ailing economy, and pledged to ‘use the strength of the government’s balance sheet to pump billions of pounds into reducing the cost of loans for small and medium sized businesses’ as the region faces an increased risk of a double-dip recession
• UK stocks drop for the 6th day yesterday amid signs US lawmakers will fail to agree on budget cuts, raising the prospect America will face another credit rating downgrade.
• This morning the pound rises from a 6 week low against the dollar before a government report that economists said will show Britain’s budget deficit narrowed in October. 

ELSEWHERE

• The Bundesbank warned of a ‘pronounced’ slowdown in the Eurozone as the central bank sees Europe’s largest economy growing 0.5% - 1.0% next year versus an initial forecasts for a 1.8% expansion in GDP, and the slowing recovery may prompt the European Central Bank to carry its easing cycle into 2012 as the region struggles to contain the sovereign debt crisis.
• The new Greek government has submitted its plans for next year's budget, promising to almost halve the deficit. Finance Minister Evangelos Venizelos predicted the deficit would fall from 9% of GDP this year to 5.4% in 2012 due to a write-off of debt held by banks.
• In late afternoon trade the euro erased early gains against the dollar and ended trade near the day’s high of 1.3537.
• US Home Sales increased to 4.97M in October and came in above market expectations.
• Japan's exports have fallen for the first time in three months, reinforcing worries that the strong yen and global debt crisis are affecting the economy.
• The Yen and US dollar rally yesterday after bets increase that US lawmakers will announce that the ‘Super Committee’ failed to agree on deficit cuts, boosting demand for safe haven currencies. This ‘risk off’ attitude has caused the Australian dollar to fall to a new five week low on reduced demand, whilst the Canadian dollar falls to its lowest level in 6 weeks against the US dollar.
• On a positive note for the US Moody’s affirmed the US’s AAA credit rating but maintained its negative outlook. 

DATA TO LOOK OUT FOR (all times GMT)

• Today the UK releases Public sector Net borrowing at 9:30am.
• Canada releases Retail sales at 13:30pm which is expected to show no changed from the previous release.
• The US GDP annualized is also released at 13:30pm these are expected to be revised down to 2.5% from 3.3% which could send investors further towards safe haven assets.
• The European Monetary Union releases Octobers Consumer Confidence which is expected to fall further to -20.
• The US also releases its November FOMC minutes at 7pm. 

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  

• Sterling retreated yesterday from the six week high seen against the dollar after the recent increase in risk appetite which has been the driving force in the markets dried up a little after final decisions from the EU summit were delayed until Wednesday’s meeting. Sterling retreated from a new high of $1.6002 settling down to trade around the $1.5950 level.
• With the final decision on the Euro zone expected at tomorrow’s meeting it wouldn't be a surprise to see fundamental data largely ignored by the markets in the run up to the meeting.
• David Cameron and French President Nicolas Sarkozy yesterday argued over the right of non-euro nations to attend the October 26^th European summit, with Sarkozy stating that if the UK wanted to be involved they should have joined the euro.
• Last night the UK parliament rejected the motion of a referendum relating to British involvement in Europe, whilst this was the result Cameron was after the fact there has been a rebellion amongst his party has not done anything to help his position as leader.
• Today’s UK current account data is unlikely to show any signs of the desired ‘rebalancing’ towards external driven growth with consensus at £-9.2B and a previous of £-9.35B.

 ELSEWHERE

• Yesterday data from Europe showed that the manufacturing sector contracted beyond expectations to 47.3 its lowest point since July 2009 from 48.5 previous, while the services sector slipped further to 47.2 from 48.8. These figures show an overall contraction in economic activity adding fuel to the on-going concerns that the euro zone may enter an industrial, if not fully fledged recession from this quarter onwards.
• The euro strengthened slightly against the US dollar and the pound yesterday after a mixed day which was driven by investor sentiment over hopes a concrete plan will be put in place to tackle the euro zones debt crisis.
• EUR/USD gained by 0.54% on the day whilst GBP/EUR mirrored the move closing around €1.1489 from the open price of €1.1520.
• USD/JPY hits fresh record lows with many analysts expecting further downside still to come.
• Typically, over the past few weeks, there has been one trade for the market: risk-on or risk-off. In a 'risk-on' environment, the Australian Dollar and the Euro typically fair better; in a 'risk-off' environment, the Japanese Yen and the U.S. Dollar are typically the best performers. Ahead of the U.S. session on Monday, the commodity currencies were among the best performers versus the U.S. Dollar, while the European currencies, the British Pound, the Euro and the Swiss Franc, were the worst performers.
• Chinese manufacturing grew for the first time in 4 months whilst Japanese export growth slowed in September but still doubled economists’ forecasts.
• NZD lost ground last night by on average 0.5% against its leading counterparts in response to Q3 CPU falling short of expectations. Further drops are likely ahead of Wednesdays RBNZ monetary policy announcement.
• The Canadian dollar has certainly benefited from the stubborn risk-appetite climb; but its performance has clearly lagged its more yield-intense counterparts. With USDCAD hovering just above parity (1.0000), we are met with fundamental conflict. On one side, we have risk trends. And, on the other, we have the Bank of Canada rate decision. The policy authority has maintained a dovish tone. Will they threaten action on this view?
• In Europe today consumer sentiment is likely to show how the on-going uncertainties over the euro area debt crisis are affecting consumer confidence. Germany and Italy are likely to hover around current lows however a slight improvement may be on the cards.
• US consumer sentiment is also expected to improve with consensus for a reading of 47, helped by an improvement in September non-farm payroll.
• European leaders will gather again tomorrow to finalise plans to tackle the euro zone debt problems. We will see if they are split over the mechanism of implementing the European Financial Stability Facility and the role of the European Central Bank. They committed yesterday to announce steps at tomorrow’s summit in order to ease concerns and bring back lost confidence.
• In the meantime Greece has been given the European part of its latest bailout package and is awaiting the tranche from the International Monetary Fund.

DATA TO LOOK OUT FOR (all times UK BST)

• 09:30 UK Current Account.
• 09:45 BoE Governor Mervyn King Speaks.
• 14:00 Bank of Canada interest rate decision where markets expect them to keep rates unchanged at 1.0% and there is a strong chance they may retreat from their implied tightening bias back to a neutral stance.
• 15:00 US Richmond Fed manufacturing with markets expecting a reading of 0 from last month’s -6, US consumer confidence and US housing starts.

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.