Greek stock exchange has reopened after a 5 week shut down

The Day So Far

We have reached August and the activity levels in the markets this morning have been subdued as is often the case in the summer months. Liquidity levels are low and so this can create sharp exaggerated moves as we saw on Friday with the EURUSD spiking 140 pips off the US Employment Cost Index reading that came in at a 30 year low. This reaction is evidence (if we needed it) that every piece of labour market related or inflation related data from the US is going to get a lot of scrutiny in the next six weeks as we march towards the September Fed meeting where markets roughly see a 50:50 chance of lift-off. So this of course makes the big event of this week Friday’s Non-Farm Payrolls report along with average hourly earnings figures for July.

This morning has seen the final Manufacturing PMIs releases with Italy announcing a better than expected number of 55.1 which puts the reading at a 4 year high. We have seen European equities generally move higher after these figures with the reading for the Eurozone as a whole coming in at 52.4 vs Exp 52.2. Elsewhere it has been quite with some minor dollar strength. Perhaps the most notable move of the Asian session was crude oil breaking below last week’s double bottom at $46.86 and so extending its bear market move. The other interesting development has been that the Greek stock exchange has final reopened after a 5 week shut down. They’re going to be wishing they never bothered because Greek stocks plummeted with the finance sector particular getting hammered with several stocks halted limit down at -30%. To rub salt into the wound, the Greek Manufacturing PMI reading came it at a staggering 30.2, which is a record low and way surpassing the numbers seen even during the height of the EZ debt crisis in 2011 and the global financial crisis in 2008/9/.

The Afternoon View

Today we have US data in the shape of Personal Income and Spending as well as the ISM Manufacturing report. We expect a low volume session and we have a neutral/long bias for the S&P, a bearish outlook for the EURUSD, a long entry for T-Notes and maintaining our short bias for crude after the break lower last night.