Good morning, I hope you had a good weekend. Well that was worth having the Greek referendum last weekend as this weekend they are subjected to further austerity demands and we still have no deal. European leaders gave Greek Prime Minister Alexis Tsipras a straightforward choice: ditch his principles or quit the euro.
Greece Latest
Tsipras was presented with a laundry list of unfinished business from Greece’s previous bailouts at an emergency summit that stretched in its 14th hour by 5:59 a.m. Monday in Brussels. Euro-area chiefs gave Tsipras three days to enact their main demands to keep alive chances of adding bailout funds of as much as 86 billion euros ($96 billion) to earlier commitments of 240 billion euros.
With Greece running out of money and its banks shut the past two weeks, the gathering was billed as the country’s last chance to stay in the euro. Tsipras, who says he wants to keep Greece in the currency union, has been in financial limbo since his government missed a payment to the International Monetary Fund and allowed its second rescue package to lapse on June 30.
“The situation is extremely difficult if you consider the economic situation in Greece and the worsening in the last few months, but what has been lost also in terms of trust and reliability,” German Chancellor Angela Merkel told reporters.
US & Asia Overnight from Bloomberg
Asian stocks rose, with the regional index on course for a third day of gains, as investors weighed negotiations between European leaders and Greece.
The MSCI Asia Pacific Index added 0.4 percent to 141.63 as of 9:10 a.m. in Tokyo after dropping 3.7 percent last week. E-mini futures on the Standard & Poor’s 500 Index retreated 0.5 percent, while Japan’s Topix index added 1.1 percent as the yen pared earlier gains.
Euro-area leaders presented Greek Prime Minister Alexis Tsipras with a laundry list of unfinished business from previous bailouts he’d pilloried in opposition and during six turbulent months in office.
“Investors have taken the view for a long time that some sort of deal would happen in Greece, and that still appears to be on the table,” John Calverley, head of global thematic research at Standard Chartered Bank, told Bloomberg TV. “China is far more important. The government has already taken significant measures and we’ll have to see how it plays out this week.”
China reports trade data after two days of gains in the Shanghai Composite Index, where about half of companies were halted following a recent selloff. Even after an 11 percent two-day rebound, the benchmark equity gauge is down 25 percent since June 12.
Australia’s S&P/ASX 200 Index declined 0.2 percent, as did New Zealand’s NZX 50 Index. South Korea’s Kospi index climbed 0.2 percent. [Ref]
FTSE Outlook
Fairly positive start to the FTSE helped by a positive Asia session on the hope that a deal is going to be done at some point. On the ASX, after an initial drop it rallied back and I think the FTSE will follow a similar pattern – mainly as we are testing the top of the daily channels as I write this. We have 6695 (top of 10 day Bianca) 6712 (top of 20 day Bianca) and 6707 (top of 20 day Raff) as well as the monthly pivot at 6691. So, for today I am thinking that we have an initial dip off the daily channels, mostly likely down to the daily pivot at 6666, though we do have the 6650 level as support just below that. At the moment the moving averages are bullish on both the 10 and 30min charts so I have a slight bullish bias as I am writing this, and we did have a decent Asia session.
So, looking to go long on any initial dip from the 6680 area, at around the 6650 support area, and we may see 6666 daily pivot just about hold. Support below 6650 is at 6630 and then 6588 though I do expect 6650 to hold this morning. Some Greece news thats positive will easily push us through those daily channel resistance lines, but for the moment we have a fairly tight range between support and them. Which one will break first…..