QROPS update 23rd November 2011 Pension drawdown & 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

• UK public sector borrowing falls during October compared with the same month last year according to The Office for National Statistics who forecasted a figure of £4.1bn, but the actual posted was at £3.4bn
• The Bank of England released worrying data over health of UK financial system. The Systemic Risk Survey found that many industry/market participants thought the probability of a future ‘high impact’ economic event to have increased sharply, with sovereign debt, economic downturn and funding being their three highest risk areas for Britain.
• Stability within the European bond markets pushes the pound lower against the euro at the start of trading. Sterling fell to a session low of €1.154 before recovering to €1.1595 before the close of the European markets.
• One of the most significant movements was the pounds continued rise against the NZD, moving from a low of 2.08 to 2.10023 at the closing bell.
• Sterling continued its decline against the USD, falling through the early hours of today’s London session dropping to a low of $1.5556
• This morning, minutes from the Bank of England’s policy meeting earlier in the month reveal a 9-0 vote in favour of leaving Quantitative Easing unchanged, this came as little surprise as the central bank have said they like monitor economic conditions for 3 months after an increase to assess its effect before putting more money in the pot. The pound remains largely unchanged after the

ELSEWHERE

• Standard and Poors maintain Spain’s credit rating at AA- following the countries recent elections, however their outlook is still negative largely due to the soaring level of unemployment; unemployment is however one of the key areas that the ratings agency expects to see attacked by the new administration.
• US political grid lock may adversely affect economic growth – this is the view that has emerged following the inability of the US congressional committee to strike a deal on Monday.  Although it is widely agreed that there might only be limited reaction from the market, budget cuts coming into force in 2013 compounded the sensitivity of the market to weaker than expected GDP data.
• The IMFs announce its Precautionary and Liquidity Lines, designed to support those established economies that may face issues over short term lending and break “chains of contagion”. This is viewed as a six month lifeline, and saw US bond prices spike on its announcement.
• Director General of the Bank of Italy, Fabrizio Saccomanni has denied that a 7% yield on the country’s bonds is a “point of no return”.  This comes as Spain struggles to issue its full €3bn debt target.  The Spanish Treasury manages to issue €2.98bn, but at a yield of 5.11%. 
• Third quarter US GDP is revised lower at 2.0% which confounded expectations but this may not alter the anticipated Q4 growth expounded upon by a number of sources, as September’s external trade data, solid sales and industrial output are still likely to accelerate growth.
• The value of crude may fall as traders look to take advantage of an emerging short.  Bearish sentiment in the market is likely to see trades place stops at $97.50, but supply concerns from the Saudis may prompt a medium term return to higher pricing.
• Fundamentals on EUR/USD tell traders the rate should be lower. Following the close of the European session the rate moved higher to €1.35175. The dollar has pulled back losses and currently trading in the mid $1.34’s.

DATA TO LOOK OUT FOR (all times GMT)

• US data released this afternoon starts with MBA mortgage approvals at 12.00pm, last month’s figure show a disappointing -10%.
• This is followed at 1.30pm by Personal Consumption Expenditure figures, Personal Income data, Durable Goods Orders and Jobless Claims figures. This barrage of data squeezed in before Thanksgiving could provide some surprises.
• At 2.55pm Michigan Consumer Sentiment Index is released and the forecast is for a healthy rise to 64.6 from 60.9 last month.

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.