QROPS update 9th February 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 UK

• Given the unstable variety of positive and negative data releases since January’s meeting, the MPC are expected by many to raise its asset purchase facility today with an injection of a further £50bn bringing the total to £325bn.
• Sterling steadily weakened against many of its major counterparts through Wednesday afternoon as the markets begin to price in the chance of an increase in QE. Previous predictions were for an increase of £75bn but this has been tempered by a rise in equities and a perceived calming of financial markets. .
• The pound fell from a high yesterday of €1.2001 against the euro to fall to an overnight low of €1.1920 falling further this morning to €1.1901. It was a similar story against the dollar dropping to an overnight low of $1.5797
• Data this morning provided some relief for the pound, Manufacturing and Industrial Production figures were both slightly better than expected and the trade deficit has narrowed slightly to £7.111bn from nearly £9bn last month.

ELSEWHERE

• Greece failed again to agree on a compromise on budget cut required to receive the next tranche of the bailout package. The Greek PM is meeting Eurozone finance ministers in Brussels to broker a deal which includes €2bn worth of austerity measures.
• Despite further uncertainty of the capability of Greece to avoid default the euro has performed surprisingly well, EUR/USD climbed to an overnight high of $1.3287 opening over $1.33 this morning.
• The ECB’s monthly policy meeting later today is expected to take a back seat to the Greece negotiations, no changes are expected today and the following press conference is not expected to reveal any dramatic changes in stance.
• Credit ratings agency S&P warned they may downgrade the US credit rating in the next 6-24 months if a mid-term plan is not formulated. November’s presidential election winner will have to create such a plan or face a further downgrade after S&P removed the AAA rating last August, whether it be a second notch or a mirror move from Fitch and Moody’s.
• There was no major data from the US yesterday but there was suggestion from Fed President Williams that asset purchasing could be renewed if growth targets are not met.
• Williams echoed the statement of Bernanke that recent positive data from the labour market isn’t necessarily indicative of its long term health and sees the rate of unemployment breaching 8% for 2013
• China released alarming data regarding inflation rates posting an annualised CPI of 4.5% against an expected 4%. While the surprising figure was attributed by most to seasonal factors, it may lead to increased analysis on the progression of Chinese price stability.
• The New Zealand unemployment rate hit a seasonally adjusted 6.3% in Q4 2011, retreating from 6.6% in Q3. This improvement beat the 6.5% post anticipated by market analysts, leading to a volatile swing in NZD strength, GBPNZD fell to low of 1.8853

DATA TO LOOK OUT FOR (all times GMT)

• The BoE’s monetary policy decisions are released at 12.00pm, the voting could go either way on QE so expect some turbulent trading.
• The ECB’s policy meeting is at 12.45pm, a further rate cut of 25bps is not out of the questions but the markets are fully expecting everything to remain on hold.
• ECB President Mario Draghi address a press conference at 1.30pm.
• Initial and Continuing Jobless Claims figures are released at 1.30pm in the US.
• UK NIESR GDP estimate figures are released at 3.00pm, the figure is not the official release but provides useful information regarding the performance of the economy.

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.