Good morning. I hope you had a good weekend. Yet another emergency summit in the ongoing Greece saga, with Greek Prime Minister Alexis Tsipras presented a new plan to stave off default before an emergency summit Monday that could decide his nation’s future in the euro. The new offer “was a good basis for progress at tomorrow’s Euro summit,” European Commission spokesman Martin Selmayr, said in a Twitter posting. He also referred in German to the inception of the plan as “birth by forceps.” The euro strengthened in Asian trading. Panicked depositors have withdrawn more than 30 billion euros since December. Without a deal, Greece faces the specter of capital controls and what U.S. Treasury Secretary Jacob J. Lew said would be a “terrible” economic decline.
With the clock running down on a June 30 deadline to make payments and work out a new aid deal after months of fruitless negotiations, Tsipras will have to convince the country’s creditors that he’s ready to compromise on election promises and avoid a default. With its finances in tatters and banks bleeding deposits at record pace, it’s unclear how long Greece can hold out without a fresh infusion of rescue loans. In phone calls Sunday, Tsipras briefed German Chancellor Angela Merkel, French President Francois Hollande and Juncker on Greece’s proposal to unlock bailout funds, according to a separate statement from his office.
US & Asia Overnight from Bloomberg
Asian stocks rose ahead of Monday’s European emergency summit on Greece’s debt crisis.
The MSCI Asia Pacific Index added 0.3 percent to 147.66 as of 9:06 a.m. in Tokyo after sliding 0.7 percent last week. E-mini futures on the Standard & Poor’s 500 Index jumped 0.4 percent ahead of the meeting, which is seen as a last-ditch attempt for Greece and its creditors to devise a bailout deal.
“The U.S. market seems to be reacting somewhat positively to the new Greek proposals,” Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo said by phone. “Deadlines may be extended in order to discuss the new proposal, but it doesn’t appear to be ground-breaking.”
With the clock running down on a June 30 deadline to make payments and work out a new deal after months of fruitless negotiations, Greek Prime Minister Alexis Tsipras will have to convince the country’s creditors that he’s ready to compromise on election promises to avoid a default. In phone calls Sunday, he briefed German Chancellor Angela Merkel, French President Francois Hollande and European Union Commission President Jean-Claude Juncker on Greece’s proposal to unlock bailout funds, according to a separate statement from his office.
JPMorgan Chase & Co. said the the impact of Greece being ejected from the euro probably wouldn’t rock world markets, and the fallout in Asia is unlikely to spread beyond an initial kneejerk reaction, according to Australia & New Zealand Banking Group Ltd.
South Korea’s Kospi index gained 0.8 percent, while Japan’s Topix index climbed 0.5 percent. The Japanese gauge has fallen for three straight weeks.
Australia’s S&P/ASX 200 Index slipped 0.1 percent. New Zealand’s NZX 50 Index was little changed.
Markets in China are shut Monday for a holiday. The Shanghai Composite Index tumbled 13 percent last week, its worst weekly selloff since 2008, amid concern valuations have been pushed to unsustainable levels. [Ref]
FTSE Outlook
We are near the top of the 20 day Bianca channel as I write this with resistance at 6741, and the 10 day not much higher at 6759. We also have the 2 raff channels around this 6745 area so trying a short off these daily channels to start the week looks to be worth a go. There is also a declining 30minute channel with resistance at that 6741 so I am thinking a short from here down to the daily pivot at 6710 (weekly at 6706) before a bit of a bounce. As per usual a lot will depend on Greece and a rumour (or leak) one way or the other will probably have quite a dramatic effect. On the bullish side, if we break above these clustered daily channel resistance lines then a rise to 6770 where there is a rising 30min channel is possible – that channel tallies with the 2 most recent highs. I have gone for some bear at the 6745 area, and the daily safe zone has the stop level at 6770 so for a safe stop on a daily short that would be a good stop level based on that, or just above in fact so that the 30min channel could play out. Things certainly look quite positive to start the week so it appears markets are pricing in a positive and hopefully final, resolution to the Greek issue.