Morning traders. Many thanks to SpeckledJim, Oscar and Trees for keeping the joint jumping. I have been among the stranded at Bali airport over the weekend and look forward to returning to work to get over the stress of the holiday.
Market wrap:
Australian stocks look set for an explosive opening move this morning after news of a debt deal for Greece fuelled relief rallies across Europe and the US.
The September SPI200 futures contract surged 91 points or 1.7% to 5496 after the Greek government finally agreed terms with its creditors that keep the nation within the eurozone and provide a third round of bailout funding.
The news produced a cautious wave of buying in Europe and the US, but gains were limited by investor scepticism following months of false dawns and disappointments as the talks dragged on. The deal agreed over the weekend still has to be approved by the Greek parliament. The S&P 500 rallied 23 points or 1.11% to seal its best three-session rally of the year. The Dow gained 217 points or 1.22% and the Nasdaq 74 points or 1.48%.
"I think it's just a sigh of relief that it's over, but let's face it, they just kicked the can," Maris Ogg, president of Tower Bridge Advisors in the US, told
CNBC. "It seems like we kicked the can on a number of fronts. [US corporate] earnings probably will be front and centre in the next couple of weeks."
Bank stocks dominated gains in Europe amid hopes that the latest bailout eliminated the risk of a Greek default. The Stoxx Europe 600 rallied 1.97% to a two-week high, Germany's DAX 1.49%, France's CAC 1.94% and Britain's FTSE 0.97%. The Stoxx Europe 600 Bank Index jumped 2.41%. Greece's stock market remained closed.
The new bailout deal requires the Greek parliament to ratify a series of major economic reforms by Wednesday, including cuts to pensions and increases to sales taxes. In return, Greece will have access to 86 billion euros in fresh funding over three years.
Read more here. The deal still has to be approved by national parliaments in Europe. Greek banks are expected to re-open on Thursday.
Thoughts in the US will likely turn tonight to the new quarterly earnings season, which gets underway in earnest this evening with reports from financial heavyweights JPMorgan Chase and Wells Fargo, and Dow component Johnson and Johnson.
Australian mining giants BHP and Rio Tinto vaulted higher in US action as iron ore steadied and base metals saw relief buying. BHP rose 2.58% and Rio Tinto 3.93%. Spot iron ore for import to China yesterday held steady at US$49.90 a dry ton. In London, lead jumped 3%, nickel 4.2%, tin 2.8%, zinc 2.1%, copper 0.02% and aluminium 1%. US copper for July delivery was recently up 0.3% at US$2.55 a pound.
Oil remained hostage to a nuclear deal with Iran, easing 1% amid fears of increased supply. West Texas Intermediate crude oil for August delivery settled 54 cents or 1% lower at US$52.20 a barrel.
Gold stocks sat out the US rally, falling 0.38% as the metal struggled to a third straight loss. Gold for August delivery settled $2.50 or 0.2% in the red at US$1,155.40 an ounce.
The dollar was this morning buying 74.1 US cents.
TRADING THEMES TODAY
SWEET RELIEF: The great poker game in Brussels looks like finally coming to an end after Greece tacitly admitted it has been bluffing all along. No one is coming out of this looking good, but Syriza's reputation in particular is in tatters. After all the blustering and hectoring, they've come away from the table with nothing. The deal is a classic European stop-gap that means we'll be back here again but I, for one, dearly look forward to having something else to fill this slot each morning for the next three years. Today's market: we're set for a big gap open - great for investors and overnight holds, not so good for traders because all the profits tend to be baked in at the start, leaving nowhere for most prices to go but lower. In other words, my advice is don't buy the open unless you have a very good reason to do so. Looks like you had some good volatility to play with on the ASX last week. Oil, the dollar and iron ore seem to have come off a lot since I was last here.
ECONOMIC NEWS: NAB releases June business confidence data at 11.30am EST. Besides some big-hitting corporate reports, the US has some chunky economic data tonight, including June retail sales/core retail sales, import prices, business inventories and the small business index.
Good luck to all.
