QROPS updated 24th August 2012 Pension drawdown and QROPS & QNUPS

UK

• Sterling hit a three-month high of 1.5912 against the dollar on Thursday, tracking gains in other perceived riskier currencies. While a small pullback looks like the next step GBPUSD is firmly in an upwards trend.
• As the Bank of England continues to endorse a wait-and-see approach for the near-term Sterling may remain supported. Although, we continue to look for strength or weakness in USD and EUR as the key drivers.
• GBPEUR showed signs of a potential move to the bottom of the range at 1.2580 hitting a day low of 1.2620.
• U.K. mortgage approvals rose in July from the previous month to 28,441, the British Bankers Association said today however approvals are down from 34,125 a year earlier.
• CBI figures which indicate short-term trends in the UK retail and wholesale distribution sector, showed a huge drop from 11% in July to -3% in August.

WORLDWIDE

• Euro traders’ sensitivity to disappointing economic data remains absent, yesterdays PMI figures showed a steady contraction in the euro zone but had little effect on the strength of the euro
• EURUSD climbed as high as 1.2588, the highest level in 7 weeks, after the FOMC minutes weighed on the dollar and traders still hold optimism to potential ECB intervention and meetings over Greece. Any further upside may be capped by resistance at 1.2607.
• Euro-area services and manufacturing output contracted for a seventh straight month in August, adding to signs of a deepening economic slump as European leaders struggle to contain the fiscal crisis. The PMI figure of 46.6 was a slight improvement on the 46.5 in July, however still shows a contraction if under 50.
• Consumer confidence in the U.S. fell for the 6th consecutive time to -47.4. This was the lowest level since January, and the series of declines is the longest since 2008 as Americans’ held more pessimistic views on their finances.
• Federal Reserve Bank of St. Louis President James Bullard said the Federal Open Market Committee minutes released yesterday are no longer as relevant because the U.S. economy has picked up in the past month.
• The worst U.S. drought in a half century and record feed prices are spurring farmers to shrink cattle herds to the smallest in two generations, driving beef prices higher.
• In Australia RBA Governor Glenn Stevens continued to talk up the Australian dollar with his belief that Australia will see growth and inflation close to trend going forward.
• In Asia, new orders in Chinese manufacturing dropped to a three-year low.

INTERBANK RATES (09.00 GMT)