David Cameron

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.

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

• 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.