QROPS update 26th January 2012 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 <?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.

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