Good morning. Well, fancy a gamble? Didn’t expect that bit of news after we got the decent bounce from the 6844 area – at least managed to get a few long points from that rise. The concern is if Greece can’t/won’t pay an instalment will they have enough to pay all four instalments in one go at the end of June. We also have NFP out today in the US just to continue the theme of trying to guess whats going to happen!
U.S. stocks fell to the lowest level in a month as the International Monetary Fund cut its growth forecast for the American economy before Friday’s jobs report. Treasuries gained as the debt selloff paused, while oil tumbled.Greece asked the IMF if it could bundle its four payments for June into one due at the end of the month, after another round of talks with creditors failed in forging a deal. The Washington-based lender reduced its U.S. growth outlook for the second time this year, urging the Federal Reserve to hold off on raising interest rates this year with the government’s monthly payrolls report due Friday. The bond market stabilized following a selloff ignited by signs of a euro-area recovery.
US & Asia Overnight from Bloomberg
Asian stocks fell for a fifth day, with the regional benchmark index heading for its second week of losses, following a decline in U.S. equities as Greece asked for a deferral on its debt payments.
The MSCI Asia Pacific Index dropped 0.3 percent to 148.85 as of 9:01 a.m. in Tokyo, heading for a 1.7 percent decline this week amid a selloff in bonds and commodities. The Standard & Poor’s 500 Index dropped on Thursday as raw-material producers slid and Greece became the first country since the 1980s to defer a payment to the International Monetary Fund. While international officials have reported some progress in the talks in recent days, German Chancellor Angela Merkel said they were far from reaching a conclusion.
“The market selloff isn’t over given the huge moves we’ve seen this week in the bond markets,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said by phone. “Greece delaying debt payments is definitely not positive. There’s a lot of pressure on asset prices that’s really related to the bond market moves.”
The global bond rout, reignited this week by signs of inflation in the euro area, took a breather on Thursday, with 10-year U.S. Treasuries rising for the first time this week. Germany’s 10-year bund yields reached almost 1 percent before pulling back to 0.84 percent, while rates from Spain to Italy retreated.
Japan’s Topix index slipped 0.7 percent. Australia’s S&P/ASX 200 Index lost 0.1 percent. New Zealand’s NZX 50 Index sank 0.4 percent, as did South Korea’s Kospi index. Markets in China and Hong Kong have yet to open.
China Rally
The Shanghai Composite Index rose 0.8 percent on Thursday after changing direction at least 10 times. The ChiNext index fell from a record after Golden Sun Securities Co. suspended margin loans for the stocks amid concern that gains have gone too far, too fast.
Record growth in margin debt helped add more than $4 trillion to the value of Chinese shares this year, raising concern among some investors that valuations are reaching excessive levels. Bill Gross took to Twitter on Wednesday to say shares on the technology-heavy Shenzhen bourse are the next big trade for short sellers. The gauge fell 0.6 percent Thursday from an all-time high.
E-mini futures on the Standard & Poor’s 500 Index slipped 0.1 percent today. The underlying equity measure dropped 0.9 percent to a four-week low on Thursday. The IMF cut its U.S. growth forecast and said the Fed should hold off from raising interest rates until the first half of 2016. The government’s monthly employment data are due today, and economists predict the economy added 225,000 jobs in May, compared with April’s 223,000.
Crude was poised to snap its 11-week surge amid speculation OPEC will refrain from cutting output at its meeting in Vienna on Friday. [Ref]
FTSE Outlook
We have the NFP (Non Farm Payrolls) news at 13:30 today which will move the market, and things are pretty jittery as you saw with the fall following that announcement that Greece are going to bundle their payments. Todays pivot is 6864, and we have the bottom of the 20 day Bianca channel there which we may well back test having broken below it yesterday afternoon. I think a short at this area is worth a go. Support initially is at 6831 where we have the bottom of the 10 day Bianca channel, but the S&P EMAs have now gone bearish so I am still expecting that to drop to 2085. The bottom of the 20 day Raff is 6806 and the bottom of the 10 day is 6785. With the bottom of the 30minute channel at 6780 we may well hold that area so could be worth a risky long there if so inclined (i.e. want a gamble!)
If you are looking for help with spread betting then please consider signing up