QROPS update 2nd 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

• Q3 GDP first estimation figures show a 0.5% growth, slightly better than 0.3% consensus and an improvement on the Q2 0.1% figure. The positive was overshadowed by poor Manufacturing PMI data for October which showed the fastest contraction in 2 years, down to 47.4 from 50.8 in September.
• Investors are more interested on the UK's Q4 GDP figures to see if the recent bout of Quantitative Easing by the BOE will have a positive effect on the economy
• Nationwide Housing Prices showed an improvement from 0.4% in October, up from 0.1% in September.  The Year on year figure showed a rise from -0.3% to 0.8%

ELSEWHERE

• The Euro fell across the board as the Greece saga escalated after Greek Prime Minister George Papandreou pledged to put the European Union’s latest accord to a referendum.  Just 5 days after Greece received the latest bailout plan the 'double referendum', could see the country default if the plan is rejected by voters, and also puts a huge obstacle in the way for the ECB as they fight to tackle the spiralling debt crisis
• Eyes are also on the possibility of an interest rate cut by the ECB in the near future and this coupled with the latest 'spanner in the works' by the Greeks saw the Euro fall to a 3 week low $1.3608 over a 1.8% drop from its $1.3870 day high.  The Euro also fell back against Sterling after re-tracing some losses and finished the day around €1.1650
• In the US ISM manufacturing index dropped to 50.8 in October from 51.6 in September as the slowing global economy may be limiting demand for American-made goods, restraining production and the industry that’s paced the two-year-old recovery. 50 is the midway point between expansion and contraction.
• US Construction Spending grew 0.2% in September, in comparison with the 1.2% increase registered in August
• The dollar weakened against the majors overnight amid speculation that the weak U.S. economy may spur the central bank to consider more asset purchases, or quantitative easing, to support growth.
• Major financial institution MF Global Holdings Ltd are under investigation by U.S. regulators after filing for bankruptcy protection.  This morning European PMI Manufacturing came in weaker than expected at.

DATA TO LOOK OUT FOR (all times GMT)

• This morning in the UK, PMI Construction is released, the figure is expected to show a slight improvement on last month’s 50.1 but there will be more attention on today’s figure after yesterday surprise drop in construction.
• In the US there is a mix of data this afternoon, this includes ADF Employment change which is a general view of employment, and expectations are that this may increase from 91k to 100k.
• The main announcement of the day will be at the FEDS press conference where investors will be looking for 'watchwords' in relation to the FOMC split, and uncertain economic outlook.  Further imminent Quantitative Easing looks unlikely for now, but this could certainly change if the already fragile economy deteriorates further

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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