Good morning. Well we got the rise towards 6650 yesterday but unfortunately it didn’t dip down to the 6546 order level for the ideal long entry. Was just a case of hopping on and riding it up. It stalled at about 6640 as profit was banked and more uncertainty over Greece. I saw that IG have now also raised their margin requirements (following Intertrader last week) from Friday for trades Friday afternoon and over the weekend – so they are expecting increased volatility then. The US is closed tomorrow so we have the NFP figure being released today at 13:30.
Greece – latest
European stocks advanced amid investor optimism that Greece and its creditors can work out a bailout deal and keep the Mediterranean nation in the euro area.
Greek Prime Minister Alexis Tsipras signaled he’s prepared to compromise on the starting point for talks. Shares trimmed gains after he reiterated his call for voters to reject austerity measures in Sunday’s referendum.
Greece has already missed a $1.7-billion payment to the International Monetary Fund, after previous proposals to creditors were rebuffed.
“It seems they are on their way towards some type of a deal,” said Otto Waser, chief investment officer at R&A Research & Asset Management AG in Zurich. “It’s a first step, and if they decide there is room for negotiation, the markets will stay up. One percent of the advance is just a rebound from previous days’ losses and the rest because of this new proposal. Ultimately, Greece will stay in the euro.”
Three days of capital controls, rationing pensions and the expiry of its bailout pushed the Greek government to say it’s willing to accept creditors’ latest offer as a basis for compromise. Sunday’s referendum remains a stumbling block, along with disagreements over pensions, spending and taxes. Tsipras called for voters to reject austerity measures to help strengthen the government’s negotiating position. [Ref]
US & Asia Overnight from Bloomberg
Asian stocks rose for a third day, following gains in Europe and America, with a weaker yen buoying equities in Tokyo as investors awaited developments in Greece and U.S. jobs data.
The MSCI Asia Pacific Index gained 0.1 percent to 146.69 as of 9:01 a.m. in Tokyo. Japan’s Topix index advanced 1 percent after the yen slid 0.5 percent Wednesday. Futures on the FTSE China A50 Index gained 3.3 percent after Chinese securities regulators relaxed margin-trading rules and cut equity-transaction fees in their latest attempts to prevent its bear market from deepening.
The Standard & Poor’s 500 Index added 0.7 percent and the Stoxx Europe 600 Index jumped 1.5 percent after two days of declines as Greece signaled it was ready to compromise on ending a standoff over bailout aid. The bid was rejected by euro-area leaders, who have said they won’t hold talks until after Sunday’s referendum on creditors’ demands.
“There has to be a negotiated deal there and I think the market believes there will be at the end of the day despite the drama,” Michael Cuggino, a fund manager at Pacific Heights Asset Management LLC in San Francisco, told Bloomberg TV. “Corporate earnings in the second quarter along with the labor data will give us an indication as to what we’re going to see going forward.”
Australia’s S&P/ASX 200 Index was little changed and South Korea’s Kospi index rose 0.4 percent. New Zealand’s NZX 50 Index advanced 0.2 percent. Hong Kong’s market reopens Thursday after a holiday.
China Futures
FTSE China A50 Index futures trading in Singapore gained after the China Securities Regulatory Commission said it will no longer require brokerages to force the sale of stock held by clients with insufficient collateral, and will allow “reasonable rollover” in margin trading. China’s two bourses will reduce the fees by 30 percent starting Aug. 1, the Shanghai Stock Exchange said.
Chinese stocks have been on a rollercoaster over the last two weeks with investors torn between hefty valuations and the government’s efforts to prop up the market.
In the U.S., companies added 237,000 workers in June, the most in six months, data from Automatic Data Processing Inc. showed Wednesday. A separate report showed manufacturing expanded in June at the fastest pace in five months, indicating domestic demand is allowing American factories to withstand sluggish overseas economies.
E-mini futures on the S&P 500 were little changed on Thursday. [Ref]
FTSE Outlook & Analysis
I’m feeling a little bit bullish to start off with today, and think that we may well get a rise from the 6581 level. There hasn’t been much bearishness overnight (and we have had a pretty positive ASX200 Australia session) and also since the 30min chart rolled over to bearishness at 8pm last night we have only dropped 10 or so, whereas I would usually expect a bigger reaction from that. The pivot today is 6586 so we are just on that as initial resistance, but I think we are going to head up to 6626 where we have the 200ema on the 30min, with the 25ema on the daily at 6734 above that for a bigger picture resistance level. There is the the top of that rising 30min channel at 6666 first so might be worth a short there with a tight stop.
All that said, if the 6581 level breaks then I think we will likely see the bottom of the 20 day Bianca channel at 6516 and if it gets really bearish the bottom of the 10 day at 6446. We are not out of the woods yet with regards to resolving the Greece situation and I am still watching the S&P for a rise to 2095 before more downside. So cautiously bullish for today.