Greek voters roundly reject referendum on ECB deal

Economic data

- (CH) Swiss June CPI M/M: +0.1% V -0.1%E; Y/Y: -1.0% V -1.2%E
- (CL) Chile May Economic Activity Index (Monthly GDP) M/M: % v 0.1%e; Y/Y: 0.8% v 1.5%e
- *(RU) Russia Jun CPI M/M: 0.2% V 0.3%E; Y/Y: 15.3% V 15.4%E; CPI YTD: 8.5% V 8.6%E
- (RU) Russian CPI Core M/M: 0.4% v 0.4%e; Y/Y: 16.7% v 17.1% prior
- (HK) Hong Kong Jun HSBC PMI: 49.2 v 47.6 Prior (3-month high; 4th consecutive month of contraction)
(US) Jun Final Markit Services PMI: 54.8 v 54.9e; Composite PMI: 54.6 v 54.6 prelim
(US) Jun ISM Non-Manufacturing Composite: 56.0 v 56.4e
(US) Jun Labor Market Conditions Index Change: 0.8 v 2.0e
(CA) Canada Jun Ivey Purchasing Managers Index (Seasonally Adj): 55.9 v 55.5e; PMI Unadj: 59.5 v 65.2 prior
(BR) Brazil Jun Vehicle Production: 184.0K v 210.1K prior; Vehicle Sales: 212.5K v 212.7K prior; Vehicle Exports: 48.1K v 40.8K prior
(CA) Bank of Canada (BOC) Q2 Senior Loan Officer Survey: 1.4 v 6.7 prior; Business Outlook Future Sales: 8.0 v 12.0e

US stocks are rebounding a bit from their morning lows after the Greek rejection of the austerity referendum over the weekend. EUR/USD is trading down a modest 30 pips for 0.3% to 1.1044 and while US and German government bond markets are giving back some of their early pop. As of writing, the DJIA is down 0.36%, the S&P500 is down 0.33% and the Nasdaq is down 0.28%.

Greek voters roundly rejected the ECB bailout terms in a country-wide referendum. Last week, the polls showed the "yes" side with a small lead, but the tide turned over the weekend as the "no" side won with 61.3% of the vote on Sunday. Currencies in Europe and Asia were initially weighed down by the result, but losses were tempered after Greek Finance Minister Varoufakis announced his resignation, handing power to Euclid Tsakalotos at an undisclosed time. The heads of the Greek political parties have met and early indications suggest all parties stand ready to support Tsipras in future negotiations with creditors, while everyone waits in anticipation of a joint statement from Merkel and Hollande scheduled for the mid NY afternoon. One report has suggested Eurogroup members are mulling two different options that are intended to show a tougher stance towards Greece.

Humana stock is up 3% this morning after Aetna's $34.1B merger offer of $230/share deal in cash/stock was announced last week. Other reports indicated that Anthem and Cigna had rekindled their own talks. Humana cut their FY15 EPS guidance from $8.66 to $7.75, citing divestitures. The company's projected GAAP EPS of approximately $9.28 was reduced to exclude $1.53 per share associated with the full amount of the expected gain from the sale of the company's Concentra business. For the second quarter of 2015, the company's GAAP EPS guidance range of $2.78 to $2.83 was reduced to exclude $1.18 per share associated with the expected pretax gain from the sale of the company's Concentra business, resulting in adjusted EPS guidance range of $1.60 to $1.65.

Aetna stock is down 4% after it issued a buyback update following its bid for Humana: Prior to closing, Aetna's ability to repurchase its own shares will be limited. To meet its deleveraging plans, Aetna expects to suspend its share repurchase program for the combined company for approximately 6 months following the closing of the transaction. In addition, Humana will be suspending its share repurchase program.

Weight Watchers stock rose sharply this morning after reports that an activist hedge fund is talking with potential partners to make the majority owner an offer. Three sources told the New York Post that the total could be roughly $2B. The company has failed to remain competitive against functions of newer apps and wearables, and the stock has dropped from its 52-week high of $29.84 to its previous close of $4.09. At this time, WTW is up approximately 15% on the day to $4.70.

Chinese regulators continue to adopt further measures to stabilize the country's stock market. China Securities Regulator Zhang said this morning that the PBOC would provide all needed liquidity and would inject capital into CSRC-owned China Securities (CSF), which will then use the funds to expand brokerages' business of financing investors' stock purchases.

An Iranian official indicated that his country's oil output would rise sharply if sanctions are lifted following nuclear talks in Vienna. He estimated that the current number of 1.2M bpd could increase to 2.3M bpd, further liberalizing the oil market and putting downward pressure on global prices.

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
- 11:30 (US) Treasuries to sell 3-Month and 6-Month Bills
- 16:00 (US) Crop Condition Report
- 18:00 (NZ) NZIER Think Tank Q2 Business Opinion Survey: No est v 23 prior
- 20:30 (TW) Taiwan Jun CPI Y/Y: -0.7%e v -0.7% prior; WPI Y/Y: -9.2%e v -9.5% prior
- 21:00 (PH) Philippines Jun CPI M/M: +0.3%e v -0.1% prior; Y/Y: 1.5%e v 1.6% prior; CPI Core Y/Y: 2.2%e v 2.2% prior
- 23:30 (HK) Hong Kong to sell 3-month and 6-month Bills
- 23:45 (JP) Japan to sell CPI Linked 10-Year Bonds
- (UR) Ukraine Jun CPI M/M: 0.5%e v 2.2% prior; Y/Y: 57.5%e v 58.4% prior