Good morning. And so it goes on, still no Greek deal as payday looms closer. Maybe they need to speak to Wonga!? European leaders and the head of the International Monetary Fund agreed to step up the intensity of talks over Greece’s fate after an extraordinary meeting in Berlin about ways to avert a default. The top-level huddle lasted past midnight Tuesday morning at Germany’s government headquarters with Chancellor Angela Merkel, IMF chief Christine Lagarde, European Central Bank President Mario Draghi, French President Francois Hollande and European Commission President Jean-Claude Juncker in attendance. The goal was to hammer out an offer that Greece could consider in coming days, according to two people familiar with the plan. After Merkel left, her office put out a statement saying the five leaders “agreed that work must now be continued with greater intensity” and that “they have been in closest contact in recent days and want to remain so in the coming days, both among themselves and naturally also with the Greek government.” At the moment it really is all about Greece though the two trades yesterday worked well, the short from 7032 working very well in the end.
US & Asia Overnight from Bloomberg
Most Asian stocks advanced as the yen held near a 12-year low against the dollar after data showed growth in U.S. manufacturing.
About five shares rose for every three that fell on the MSCI Asia Pacific Index, which slipped 0.1 percent to 150.98 as of 9:02 a.m. in Tokyo. U.S. output expanded more than forecast in May as orders rose at the fastest pace in five months, while construction spending beat estimates. The reports are the latest in a slew of data due this week that the Federal Reserve will weigh to determine when to raise interest rates. Japan’s Topix index climbed for a 13th day with the yen at 124.83 per dollar.
“This data gives comfort to a recovery in the second quarter and shows it’s stabilizing,” Tony Farnham, Sydney-based strategist at Patersons Securities Ltd., said by phone. “There’s moderate growth now in the U.S. economy, which gives the Fed an opportunity to take some of the steps to getting monetary policy back to a more normal level.”
The Shanghai Composite Index, which is yet to open, led gains across the region Monday, climbing 4.7 percent and extending its advance this year to 49 percent after an official manufacturing gauge showed a third month of expansion.
The Topix added 0.1 percent. Australia’s S&P/ASX 200 Index rose 0.2 percent, with economists forecasting the Reserve Bank of Australia will keep its record-low 2 percent benchmark unchanged Tuesday. South Korea’s Kospi index climbed 0.2 percent. New Zealand’s NZX 50 Index gained 0.4 percent.
Futures on Hong Kong’s Hang Seng Index slid 0.2 percent and contracts on the Hang Seng China Enterprises Index of mainland firms listed in the city declined 0.5 percent in most recent trading. Both underlying gauges have climbed more than 16 percent this year, compared with an advance of 9.6 percent gains on the MSCI Asia Pacific Index. FTSE China contracts traded in Singapore were down 0.3 percent.
E-mini futures on the Standard & Poor’s 500 Index added 0.1 percent. The underlying measure rose 0.2 percent on Monday after growth in the Institute for Supply Management’s factory index outweighed data showing consumer spending stalled. [Ref]
FTSE Outlook
I have gone for a dip down to the bottom of the Bianca channels, which are both at similar levels – 6933 for the 10 day and 6928 for the 20 day – before a bounce on hope that a Greek deal is done. I am still expecting that they will sort it out, just going to be the usual 11th hour thing. If that 6928 area breaks then the next support is 6901, 6892 where we have the bottom of the Raff channels. Resistance wise, we have the daily pivot initially at 6981, then 6998. A move above this will likely open up a trip to 7033, 7059 and 7088 possibly. If a deal is announced today or tomorrow I expect markets will react favourably with upside so be ready for any moves like that. With golds rise from 1185 yesterday to above 1200 it looked like a flight to safety, but it then fell back again. Certainly an interesting week this one! The S&P fell to 2102 but the bulls fought it back with a decent rise back to 2115, though there does appear tho be a bit of weakness creeping in now and the short term top was most likely in at 2136 rather than the 2140. Back to the FTSE and the daily chart is a bit bearish now, looking at the EMAs, so the bulls might have a job to break 6998, unless helped by positive Greek news. There is also the 200ema on the 30min there to temper the bulls. Going to be another interesting day I think!
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