QROPS 28th October 2011 pension drawdown, flexible pensions QROPS and QNUPS

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 advanced against the USD during the whole of yesterday’s trading session taking advantage of the “risk-on trading” sentiment in the market, posting an overall overnight high of $1.6140 against the greenback.
• Sterling fell against the euro after Wednesday night’s confirmation of the EU heads of states agreement concerning the Eurozone’s bailout fund, posting a 1.4% fall over the course of the day, posting a low of €1.1323 during the US trading session, falling through its 200 day moving average.
• The UK enjoyed a better than expected economic data release as the CBI Realised Sales figure, beat the forecast figure of -15 to post a figure of -11, this piece of data is a leading indicator of consumer spending.
• Gfk Consumer Confidence figure released this morning posts a figure of -32 missing the forecast figure of -30, however the reaction overnight was fairly limited.  The data does show traders that the level of optimism in the market place is at an all-time low and pessimism is at the forefront of trader’s mindset as this is the highest figure posted since September 2009.

ELSEWHERE

• Yesterday saw the confirmation that the EU heads of state had come to a decision regarding the bailout fund and reaching an agreement concerning the Greece debt crisis. On the back of this news we saw a euro rally across the board. The single currency made gains against a basket of currencies, showing the market was braced for bad news.
• The plan has since come under some serious scrutiny as many details have been missed out such as: will the voluntary haircut on Greek bonds be agreed? How will the leverage of the bailout fund work? The market is expecting these and more details to be clarified overt the coming weeks.
• In a slight twist, we saw news emerge that China are also potentially set to invest in the EFSF, of which the values are not yet set. It is expected that if the nation is to invest into the fund, the investment will carry several conditions, one of which potentially is that the Chinese contribution to be denominated in RMB, which essentially will help China protect its investment against currency fluctuations.
• Thursday’s session and overnight saw the Euro make a 2.2% gain against the USD posting a 7 week trading high at $1.4247. This move highlights the markets new found confidence in the euro and the gains were the most during a single session since last July.
• The US did see some positive data, in the form of their preliminary GDP figure of which posted a figure of 2.5% against a forecast 2.4% and a massive improvement from the previous quarter’s growth of 1.3% posted. This release of positive data seemed to squash the earlier quarter fears that the US was entering another recession or double dip as commonly known. Unemployment claims of which was also released yesterday saw a posted figure that was in-line with what was forecast, showing 402K against the forecast 400K.
• AUD benefited from the “risk-on” trading and rose 3.1% to post a high of AUD 1.0718 against the USD, even despite the nation posting a weaker than expected inflation figure at 0.6% leading the market to speculate we may see the Reserve bank of Australia to cut interest rates next week.

DATA TO LOOK OUT FOR (all times UK BST)

• US Core PCE Price Index month on month is expected to be released posting a figure of 0.1% against last month’s figure of 1.21%
• KOF Economic Barometer is being released at 10.30am and is expected to post a figure of 1.00, this particular piece of data is expected to forecast the direction of the economy over the next 6 months.
• Personal Spending month on month is being released at 1.30pm and is expected to post a figure of 0.6% against last month’s reading of 0.2%.
• There is no data being released from the Eurozone and from the UK for the rest of today.

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.

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