Sunday, 5 July 2015

7pm update - EU markets especially rattled

Whilst US equity futures remains significantly lower, sp -25pts @ 2051, there is understandably a stronger reaction in the EU markets. The French CAC is set to open -3.2%, with the German DAX -3.0%. Metals are holding moderate gains, Gold +$6, whilst Oil is -1.0%



Monday is set for a significantly lower open... the issue now is... what sort of 'spooky news'  headlines will flash across the wires?

I'd expect many of the EU leaders to be making some kind of comment across Monday.. ahead of a Tuesday emergency meeting.

**ECB are set to maintain.. but NOT increase the current ELA (bank liquidity program) to Greece, but as things are... the Greek banking system will be completely zeroed out within the next day or two.

Unless some bizarre 'bonus deal' is offered... with some sig' degree of debt writeoffs, the Greek govt' is stuck... other than to hit the PRINT button for Euros... or simply... revert to the Drachma - something that most Greeks don't want.

I don't envy them, but then... they dug their own hole.. across many decades.

It still riles me when I hear 'austerity' as bad.. even from those I respect/follow.

Greece is in the bloody hole because they CHOSE to spend more than they produce for decades. Who is to blame.. other than the Greek people themselves.. especially those above age 50?

*to be clear, I'm delighted at the 'no' vote, but still.. .we know that Tsipras is now on the hunt for more money/loans/debt writeoff from the Troika... not to reduce spending.. or increase taxes.

The Greek people remain in denial... especially this night.

6pm update - futures snap lower

With the Greeks voting against ratifying the latest Troika offer, equity futures have opened significantly lower, -29pts @ sp'2047, taking out the key 200dma. There really isn't much support until the giant 2K threshold. Metals are a little higher, Gold +$4, whilst Oil snaps -1.6%



*am collating data...... bear with me

Okay.. so. with things as they, the sp'2050s have been lost, with the recent low of 2056 being decisively taken out.

I am well aware a fair few are seeking a floor in the 2040s.. or even 2020s.. but what is clear... the Greek result is majorly bearish for equities this Monday morning.

China Govt' is in semi-panic mode.. and it will be interesting to see if they can manipulate a net daily gain in the Shanghai comp'. Considering the Euro turmoil... it won't be easy.. even if they hit the BUY button across the day.

*China opens in another 3.5 hrs

6.11pm.. sp -26pts...  2050.    intra low so far.. -32pts @ 2044.

In scheme of things... nothing too extreme, but still... some key downside breaks already achieved.

6.25pm.. sp -27pts... 2049... notably.. unable to re-claw back above the 200dma.

So... where will be the buyers come in this coming week?

2040s?  probably not.

2020s... maybe

2K.... absolutely... but at this level.. it'd really be a problem for those seeking new highs in August (or even Sept)... which does include yours truly.

6.38pm.. EU indexes are naturally weaker,  French CAC and Germany DAX, both lower by around -3%.

5pm update - OXI OXI OXI OXI OXI

Good evening. The Greek people have rather clearly voted OXI ('NO') in the referendum, with around 61% of the electorate voting against ratifying the most recent Troika bailout offer. World capital markets are not going to be pleased at this little rebellion... Draghi, Merkel et al... will no doubt be particularly furious.


We have a rather interesting evening ahead... with the futures wheel set to spin up at 6pm EST.

I had expected a Greek 'no' vote, but certainly not quite as clear cut as we have seen.

The implications for Greece, the ECB, and the broader EU are rather huge. This night.. and the coming week will be very entertaining, but the vote will probably set off a chain reaction across some years.

As for the markets...

Considering the news.. I'd expect downside to at least the recent low of sp'2056.

Lets be clear though.. any price action under 2050 - breaking the 200dma of 2054, and there really isn't much other than empty air to the giant 2K threshold.

Man of the night.. and arguably the year so far... Tsipras

Increasingly confident..against the Troika

Greek opposition leader Samaras has already quit in disgust... although I'd expect he'll be lurking in the background for some time.

As ever... comments are always welcome.

*next update around 6.05pm.. once the initial futures have provided first market reaction.