QROPS update 24th October 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

• Sterling rallied on Friday hitting new 2 week high 1.1536, as risk appetite crept back into the market, this was mainly driven by a large UK Clearing House and also partly down to the EU Summit which took place over the weekend
• Following the outcome of the EU summit this weekend we may continue to see risk in the market, as on Friday ahead of the summit we saw Euro and sterling do relatively well as optimism that the EU leaders may reach some agreement on the best way of tackling the debt problems was reflected in the markets.
• Against the US dollar on Friday sterling gained more than 1%, pushing through a resistance at 1.5855, sterling finished the day at a resistance around 1 cent higher at 1.5953.
• The UK’s public sector net borrowing fell to £14.1bn in September, lower than expectations. The previous months figure was also revised down by £2bn to £13.7bn.
• The UK government has borrowed £63.5bn so far this year, down £7.5bn on last year suggesting they are on track to meet the deficit target.
• Overnight GBP/USD hits 1.6000 which is a new 6 week high.
• Today the UK parliament will vote to decide on the possibility of a referendum which will allow the public to vote on the UK’s place in the EU, all parties are currently instructing their members to vote against the motion, the result is not in question but the number of rebel voters is being viewed to see the strength of the leadership of the coalition.  

ELSEWHERE

• The USD came under pressure on Friday helped by a report suggesting the Fed was preparing for more easing, with weakness against, CHF and JPY only highlighting this.
• The dollar weakens against 14 of its 16 most traded counterparts as Asian shares rose after a report showed China’s manufacturing may expand in October reducing demand for refuge assets.
• Movement on Friday with EUR/USD looked like an afternoon sell off rather than any significant swing towards the Euro although optimism ahead of the EU summit may have played a part although any long term 'fix' for the euro is still a long way off.
• USD/JPY broke through the support of 76 on Friday for the first time since August, with risk back on in the market it may not be able to hold this level for long.
• The EU summit has drawn more confidence from the market, with EU leaders again agreeing that they would do whatever it took to solve the problems, however, as ever the devil is in the detail which once again seems to be missing.
• Progress appears to have been made towards an agreement on bank recapitalisation and the use of the European Financial Stability Facility to starve off the risk of bond market contagion.
• Final decisions have been now deferred until a further summit on Wednesday which despite French dissent, looks likely to include the non euro member states.
• This is the euro zones 13^th crisis summit in 21 months and attention has now turned to Italy, with increasing pressure being applied to cut debt in order to prevent a Greek style meltdown.
• This morning German PMI services rose to 52.1 from the previous release of 49.7 but PMI manufacturing falls to 48.9 against the previous release of 50.3.
• The Euro zones PMI services falls to 47.2 as does the manufacturing PMI which now stands at 47.3.

IN OTHER NEWS

• At the EU summit this weekend French President Sarkozy, told David Cameron that he was 'sick' of Cameron’s suggestions on how best to tackle the European single currencies ongoing problems, leaving a usually solid relationship feeling a little strained. Perhaps his new arrival hasn't been sleeping very well!

DATA TO LOOK OUT FOR (all times UK BST)

• This week developments and news from Europe will dominate the markets this week.

• Today is a relatively quiet day for data the main releases will come out later in the week.

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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