QROPS update 29th November 2010 Pension Foreign exchange 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

• GBP/USD saw plenty of volatility yesterday, quickly achieving the day’s high of $1.5594 at 11am from the low of the session seen at $1.5459 at 8am.
• GBP/EUR behaved with much less volatility moving within a range of less than half a cent to close the London session at €1.1650.
• A report by the Organisation for Economic Co-operation and Development (OECD) yesterday suggested a possible £125bn increase to the QE program bringing the total to £400bn. The report also warned that by 2013, unemployment could reach 9% and inflation was expected to fall below the 2% target.
• The British Chamber of Commerce (BCC) had previously projected growth in GDP of 2.1% for next year has now revised it to 0.8%. They expect interest rates to remain at 0.5% until Q4 2012. .
• Sterling performed well against JPY yesterday with a session high of 121.671 after opening at the day’s low of 120.071. 
• Earlier today the UK Nationwide Housing year on year change report revealed a 0.3% increase and a 0.4% increase month on month.

ELSEWHERE

• After making gains yesterday morning, EUR/USD fell during the latter part of the European session and continued to fall to $1.3295 during US trading.
• The OECD report has claimed the contagion risk has now made the Eurozone crisis the biggest single threat to the world economy. Coupled with the lack of a spending-reduction plan in the US the world could be at risk of a “devastating downturn”.
• The BCC’s Chief Economist, Padoan said in an interview that Germany is now at risk from contagion. Adding weight to the on-going proposal that the ECB take more of a direct role in rescuing the Eurozone.
• World economic growth is expected to fall to 4.8% in 2012 from 6.7% this year. Even China is forecast a slowdown to 8.5% in 2012 from 9.3% in 2011.
• Italy continued its auction of sovereign debt yesterday issuing €567m of 12 year bonds with yields touching 7.2%, a significant increase on the 4.5% reached at the last comparable issue. 10 year bonds however saw a subtle decrease from 7.26% to 7.14% but remained above the 7% “danger” line considered to be unsustainable in the long term.
• Italy is now described by the OECD as “entering recession” because government debt at 118% of GDP and an average economic growth rate of just 0.75% over the last 15 years,
• In the US, annualised New Home Sale data was down slightly on consensus, however the monthly figures for October were up 1.3%.
• Japan had a mixed bag of data which showed; unemployment rose 0.4% to 4.5% in October, Overall household spending was up 1% (Year on year) for October, large retailer sales were up 1.2% to -1.4% and perhaps most significantly the Retail trade (Year on year) figures came in 3% higher than the same period last year – a full 1.1% higher than the consensus.
• German CPI data was released almost as expected with year on year maintained at 2.4% and mom for November 0.1% down at 0%. Fortunately consumer confidence was up from 5.2 to 5.8.

DATA TO LOOK OUT FOR (all times GMT)

• At 10.00am Eurozone Consumer Confidence (Nov) is released; this is an important gauge of domestic market sentiment and is expected to remain unchanged from last month. Industrial and Economic Confidence figures, released alongside, are both expected to show declines.
• This morning Italy will attempt to auction off more 2 and 10 years bonds, traders are expecting a fairly poor result.
• Eurozone Finance Ministers meet today to continue discussions on Eurozone debt, again traders aren’t expecting anything particularly positive to emerge from the meeting.
• US Consumer Confidence (Nov) is projected to increase significantly at 3.00pm and US Housing Price Index (Month on month) (September) is also released.  

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.