Good morning. Will they won’t they, that is the question.. is a deal done, when will we know!? Apparently the Greeks say by Sunday… Certainly proves the old adage that markets hate uncertainty while they flop around. I expect we will have a fairly sideways day today while we await news of the Greek deal, as yesterday saw European stocks fall for the fourth time in five days amid concern Greece may not reach an accord with creditors before a payment due next week. The Stoxx 600 extended a decline after an official said the International Monetary Fund believes Greece may need debt relief and is far apart from creditors on debt talks. The country’s government said yesterday it’s nearing an accord with creditors, fueling a stock rally, only to have European officials rebuff those claims later at a meeting of the Group of Seven finance chiefs. “The mixed messages are all part of the political game,” Allan von Mehren, chief analyst at Danske Bank A/S, said by phone from Copenhagen. “It means we can expect sentiment to swing back and forth until we really get to crunch time on Greece, and I don’t think we’ll get a deal until the very last day. Markets will be quite volatile as everyone tries to read the signals.”
US & Asia Overnight from Bloomberg
Asian stocks climbed, with the regional benchmark trimming its first monthly decline in 2015, as utilities and consumer shares led gains.
The MSCI Asia Pacific Index added 0.2 percent to 151.53 as of 9:02 a.m. in Tokyo, headed for a 1.1 percent drop in May. The Shanghai Composite Index tumbled 6.5 percent on Thursday, the most since Jan. 19, after brokerages tightened margin lending rules amid speculation the government is taking steps to cool the rally. Record growth in margin debt helped fuel a 127 percent gain in the equity gauge over the past 12 months through yesterday.
“The Chinese market looks hot and frothy but I wouldn’t say it’s a bubble,” Evan Lucas, a market strategist at IG Ltd. in Melbourne, said by phone. “There are risks out there. The momentum for Chinese shares looks skewed to the upside. The Greek situation is really tough.”
Greece’s creditors said a deal to unlock rescue aid isn’t imminent as they demanded the debt-ravaged nation make stronger commitments to overhaul its economy and strengthen public finances. The Greek government saw its optimism over an agreement scoffed at as European officials gathered in Germany for a Group of Seven meeting and said much more effort is needed.
Japan’s Topix index added less than 0.1 percent, with the measure swinging between gains and losses. The central bank’s main gauge of inflation slowed to zero in April, data showedtoday, as cheaper oil counters Governor Haruhiko Kuroda’s effort to reflate the economy.
Regional Gauges
South Korea’s Kospi index slid 0.1 percent. Australia’s S&P/ASX 200 rose 0.2 percent, while New Zealand’s NZX 50 Index climbed 0.5 percent. Markets in China and Hong Kong have yet to open.
More money is changing hands trading stocks in China than in the U.S., a market more than twice its size. Equity volume in China surged since late November as monetary easing and speculation of further stimulus ignited the world’s biggest rally.
China’s central bank siphoned tens of billions of yuan from the financial system by selling repurchase agreements to targeted financial institutions, according to two people familiar with the matter. The nation’s money-market rates have tumbled after three interest-rate cuts since November to help an economy growing at the slowest pace since 2009.
E-mini futures on the Standard & Poor’s 500 Index were little changed today. The S&P 500 dropped 0.1 percent on Thursday before data today that may show the economy contracted in the first quarter. [http://www.bloomberg.com/news/articles/2015-05-29/asian-stocks-advance-to-pare-first-monthly-decline-this-year]
FTSE Outlook, Prediction for Spread betting
Get ready for Friday weirdness, especially going into a weekend of Greek negotiations where both parties are still far apart (apparently, despite that rumour on Tuesday of a done deal). Todays pivot is 7033, and looking at the 30minute chart there is a pretty decent rising channel with resistance at 7070 and support at 7007. That resistance ties in quite nicely with the top of the 10 day Bianca at 7080 so if we reach this level then I think a short is worth a go. Above the 7070 on that 30min there are hardly any PRT resistance lines so if there price were to break through that then we could be on for a decent run towards the daily channel Raff lines at 7133 and 7185 (10 and 20 day respectively). Generally today though I think we will geta fairly flat day. I also feel that the lows are probably in for the moment on the Dax but wouldn’t rule out a quick drop to take some stops down to 11580 before bouncing back. Might well tie i9n with the FTSE putting in a dip to 7007ish and then bouncing. Todays pivot is 7033 for initial support so we might get a dip to that before an early climb – the 30min EMAs are in a weak bull mode, but bear in mind its Friday and the market is a little jittery while Greece rumbles on. Certainly not an easy week to trade!
Dax (freebie for you today!)
Pivot is 11694 so I expect initial support here as well, with the 30min chart showing resistance at 11733 and support at 11617. As mentioned in the preamble above I wouldn’t rule out a quick drop to 11580 today or Monday to take out some stops of the early bulls, but it looks like the low might be in for the moment, at 11600. The daily chart is still bullish looking at the moving averages. I think a short at 11736 might be worth a try but the dax is pretty wild at the moment (again due to Greece).