Daytrading June 16 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Australian stocks look likely to open flat after sharp falls in European equities fuelled declines in the US following the failure of of the latest Greek debt talks and soft US economic data.

The June SPI 200 futures contract, which expires on Thursday, eased three points or less than 0.1% to 5540 as US stocks halved initial losses, copper hit a three-month low and oil and iron ore retreated.

The S&P 500 fell as much as 1% at the open before paring its decline to ten points or 0.46%. The Dow gave up 108 points or 0.6% and the Nasdaq 21 points or 0.42%.

“All eyes are on the tumultuous Greek negotiations which have moved the risk markets not only here in the United States, but across the globe,” Chad Morganlander, money manager at Stifel, Nicolaus in the US, told Bloomberg. “That as well as the weekly thematic will be the message from central banks, in particular the Federal Reserve.”

European equity markets reacted with predictable alacrity to news that Greece's 'last-minute' negotiations with its creditors collapsed on Sunday in less than an hour, increasing the danger of a default. Overnight, European Central Bank President Mario Draghi told a European Parliament committee the central bank was still working towards a solution but the ball was in Greece's camp ahead of a Thursday meeting of European finance ministers. Read more here. The Stoxx Europe 600 slumped 1.63%, Germany's DAX 1.89%, France's CAC 1.75% and Britain's FTSE 1.1%. Greece’s Athex Composite tanked 4.68%.

"There's just a lot of uncertainty," Ben Garber, capital markets economist at Moody's Analytics, told CNBC. "We just don't know how markets would play out were Greece to default. It's best to trade cautiously."

US traders kept one eye on this month's Federal Reserve meeting, which starts tonight and ends with a policy statement and press conference tomorrow night. Analysts expect the central bank will toughen its language as it continues to prepare the market for a likely rate rise later this year. A Reuters poll showed most economists expect the Fed to move in September. Read more here.

Last night's economic data showed there were still pockets of weakness in the US economy. While a gauge of confidence among home builders rose to a nine-month high, industrial production unexpectedly declined a seasonally-adjusted 0.2% last month. Economists had anticipated a recovery of 0.2% following a 0.5% drop in April. A separate report showed business conditions in the greater New York region deteriorated this month: the Empire State manufacturing index dropped to -2 from +3.1 in May.

BHP lost 0.9% and Rio Tinto 0.98% in US trade after iron ore eased in China for a second day. Spot iron ore for import to China yesterday declined 50 cents to US$64.50 a dry ton.

Gold stocks provided one of the night's few bright spots, rising 0.47% after haven-buying helped gold break a two-session losing run. Gold for August delivery settled $6.60 or 0.6% higher at US$1,185.80 an ounce.

Copper skidded to a three-month low as the Greek debacle pressured the euro, boosting the greenback and undermining demand for dollar-denominated commodities. In London, copper dropped 1.5%, aluminium 1.3%, lead 2.1%, nickel 1.3%, tin 0.3% and zinc 0.8%. US copper for July delivery was recently up % at US$2.87 a pound.

Oil retreated with analysts pinpointing a June 30 deadline for negotiations over Iran's nuclear program as a possible source of weakness. A deal may include the lifting of sanctions on Iranian crude, adding to global supplies. West Texas Intermediate crude oil for July delivery settled 44 cents or 0.7% weaker at US$59.52 a barrel.

The dollar was this morning buying 77.64 US cents.

TRADING THEMES TODAY

RBA, GREECE, FED: There was no real change in global market themes overnight, with European and US markets reacting to the weekend Greek news that helped drive the ASX lower yesterday. The rest of this week looks like being all about central banks - the ECB and Greece, the Fed and US rate hikes, and this morning the RBA's rate outlook. The minutes from this month's policy meeting drop at 11.30am EST. The ASX bounced nicely yesterday, but it is hard to seeing it running too high today unless the RBA springs a complete surprise. Base metals were particularly weak, with several touching multi-month lows in London last night. Trading volumes in index futures were heavy ahead of Thursday's expiry of the June SPI200 contract.

ECONOMIC NEWS: RBA Assistant Governor Guy Debelle is due to address a Sydney conference on the future of Australian financial services at 7.55am EST. Likely of greater impact are the minutes for the June RBA policy meeting at 11.30am EST. Vehicle sales data are due at the same time. US highlights tonight are building permits and housing starts.

Good luck to all.