Daytrading July 2 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Stocks look likely to open little changed as weakness in key commodities offsets a solid rally on Wall Street.

The September SPI200 futures contract eased two points or less than 0.1% to 5476 as BHP and Rio Tinto traded at multi-month lows in the US, iron ore weakened, oil slumped to late-April levels and gold settled at a four-week low.

US stocks kicked higher as economic data beat expectations and traders ignored muddled signals from the Greek debt crisis. The S&P 500 rose as much as 20 points on early optimism about a Greek deal and ended the session 14 points or 0.69% ahead. The Dow gained 138 points or 0.79% and the Nasdaq 26 points or 0.53%.

“The prospects of removing some of the macro-economic uncertainty associated with Greece is boosting stocks,”  Mark Luschini, chief investment strategist at Janney Capital Management in the US, told Bloomberg. “We also got an ADP report this morning that was much better than expected, which bodes well for tomorrow [night’s] payroll report.”

Wall Street rallied sharply at last night's open following a report that the Greek government was willing to accept nearly all the conditions attached to the latest bailout offer from their creditors. Read more here. The Financial Times report fuelled a strong rebound on Europe, where the Stoxx Europe 600 jumped 1.51%, Germany's DAX 2.15%, France's CAC 1.94% and Britain's FTSE 1.34%.

However, any hopes for a quick resolution to the Greek crisis were soon doused by statements out of Athens and Brussels. Greek Prime Minister Alexis Tsipras said his country will proceed with Sunday's referendum on the last bailout offer and urged his people to vote 'No'. Read more here. European finance ministers held a conference call before issuing a joint statement through Eurogroup chairman Jeroen Dijsellbloem that said there were "no grounds for further talks" ahead of Sunday's referendum. Read more here.

Wall Street kept most of its early advance as data pointed to improvements in the economy. Private-sector hiring hit a six-month high last month, according to ADP's monthly payrolls report. The economy created 237,000 private-sector jobs, ahead of the consensus estimate from economists of 220,000 and up from a revised May figure of 203,000. Separate reports showed manufacturing activity rose to its strongest level since January and construction spending beat expectations.

Strength in the US dollar dampened enthusiasm for commodities. The US dollar index was lately up 0.77%. The Australian dollar was down around half a cent, buying 76.54 US cents.

BHP declined 0.55% in US trade to its lowest level since January. Rio Tinto fell 1.18% to its weakest point since December. Spot iron ore for import to China yesterday slid 40 cents to US$58.90 a dry ton.

The NYSE Arca Gold Bugs index slumped 2.62% towards levels last seen in 2003 as gold failed to draw any up-draught from events in Europe. Gold for August delivery settled $2.50 or 0.2% lower at US$1,169.30 an ounce, its lowest close since June 5.

The US energy ETF shed 1.28% as oil fell sharply on news of an unexpected jump in US crude supplies. West Texas Intermediate crude oil for August delivery settled $2.51 or 4.2% lower at US$56.96 a barrel.

The mood was brighter on the London Metal Exchange, where most base metals rebounded on hopes for improved demand following upbeat US economic news. In London, copper advanced 0.2%, aluminium 2.1%, lead 1.4%, nickel 0.4%, tin 4.4% and zinc 2.3%. US copper for July delivery was recently up 0.3% at US$2.63 a pound.

TRADING THEMES TODAY

MIXED SIGNALS: As always, there was a great deal of conflicting information in last night's market action. Europe and the US allegedly rallied in rising hopes for a Greek debt deal, but when you analyse the reports, little really improved - the Greek PM is still ranting about 'blackmail' and Brussels said okay then, hold your silly referendum and then come and talk to us. In other words, markets more likely rallied because they were oversold and ready to bounce. Wall Street has a long weekend coming up for Independence Day, so tonight should be interesting - do they buy and hold or cut and run? We've had two good sessions this week and may struggle for a third, although there is room to move higher within the current downward-trending channel. BHP and Rio looked pretty wretched in US trade, likely indicating scepticism that the recent recovery in iron ore will hold amid fresh signs this week that the Chinese economy is struggling to gain any momentum. Oil fell off a cliff despite some pretty decent US economic numbers. Weakness in the Arca Gold Bugs Index suggests goldbugs are throwing in the towel - if a Greek default can't give the metal a decent bounce, what will it take?  

ECONOMIC NEWS: May trade figures are due at 11.30am EST. With Wall Street closed on Friday for the Independence Day long weekend, tonight's data includes the monthly employment update, weekly unemployment claims, average hourly earnings and factory orders.

Good luck to all.