Good morning. That was a bit of a slow drift down yesterday to the long area at 6714, with a very lacklustre bounce in the end! The Dax is hovering around the 11000 area, with some brave bulls trying to keep it just above!
Greece
Meanwhile, Greece has no plans to present new proposals at a meeting of European finance ministers this week, signaling the country won’t make further concessions to unlock bailout funds needed to avoid default. Greek Finance Minister Yanis Varoufakis told Bild newspaper any new proposals would need to be thrashed out at a lower level before they could presented to the finance ministers set to meet June 18 meeting in Luxembourg. He said that Greece remains willing to find a solution but creditors need to take Greece’s proposals seriously to end the impasse. Europe needs a “strong and comprehensive agreement, and we need this very soon,” European Central Bank President Mario Draghi told lawmakers at the European Parliament in Brussels on Monday. “While all actors will now need to go the extra mile, the ball lies squarely in the camp of the Greek government to take the necessary steps.” With signs that negotiating fatigue was stoking intransigence on all sides, some euro-area officials publicly raised the prospect of Greece’s exit from the currency region as the Greek government suggested it had reached the limits of its ability to make concessions. Greece is resisting demands for further cuts in pension spending as well as tax increases.
US & Asia Overnight from Bloomberg
Asian stocks fell as investors awaited an update from the Federal Reserve on U.S. monetary policy and a meeting of euro-area finance ministers with Greece.
The MSCI Asia Pacific Index retreated 0.1 percent to 147.26 as of 9:01 a.m. in Tokyo. The gauge lost 0.5 percent on Monday after the latest round of negotiations between Greece and its creditors fell apart. The Fed starts a two-day policy meeting Tuesday. While U.S. data from hiring to spending have indicated the economy improved after a first-quarter slump, reports Monday showed an unexpected decline in factory output.
“All week it will be about Greece and the Fed,” Stan Shamu, Melbourne-based market strategist at IG Ltd., said by phone. “We might start to see the Fed getting a little bit more upbeat and that could cause some volatility. Most traders want to be cautious first and react after we see what happens toward the back end of the week with Greece. For now, there will continue to be that element of caution in the market.”
European policy makers urged Greece to make the concessions needed to unlock bailout aid, with a June 18 meeting of finance ministers the next opportunity for a showdown between the nation and its creditors.
Japan’s Topix index lost 0.4 percent. South Korea’s Kospi index added 0.1 percent and Australia’s S&P/ASX 200 Index was little changed. New Zealand’s NZX 50 Index slid 0.1 percent.
E-mini futures on the Standard & Poor’s 500 Index fell 0.1 percent. The underlying gauge sank 0.5 percent on Monday. Factory production unexpectedly declined in May as the slump in energy output deepened.
Futures on Hong Kong’s Hang Seng Index lost 0.5 percent and contracts on the Hang Seng China Enterprises Index of mainland firms listed in the city slid 0.6 percent in most recent trading.
The Shanghai Composite Index dropped 2 percent on Monday, falling from its highest level in seven years, amid concern a flood of share sales may lure funds away from existing equities. [Ref]
FTSE Outlook
6707 looks fairly key to start the day and i have put that as holding initially for a rise to the pivot. If we do drop back and break below that 6707 area then i think we will get further declines to the bottom of the Bianca channels – we have the 20 day at 6658 and the 10 day at 6642. The 10 day Raff is at 6630 too. That said its all hinging on Greece really, then the Eurogroup meetings, Fed regarding interest rates and then we also have a bit of option expiry thrown in this week (Friday). In a slightly bullish move the price has moved above the T3 coral trend indicator overnight for the first time for a while (on 30min) so we could possibly be seeing a bottom forming though its pretty weak. If we do hold 6700 as support then a rise up past the pivot would likely reach the 200ema at 6765, then the top of the daily channels at 6820 and 6860. This latter area certainly looking good for a short as we also have the daily 25ema at 6865. At the moment it does look like everything is pointing towards a Greek default but it might just go to the wire as per usual and then a deal as the Eurozone will be quite fractured with a default. Very much a wait and see game. Despite the 6707 support as I write, the moving averages are all bearish, so the bulls will need to be quick out the blocks!
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