Market turmoil edition

Quick Recap

There is now a real chance that Greece will be gone from the Euro by this time next week. That’s because time is compressing and the EU has called a meeting of all 28 members of the zone next Sunday to discuss the Greek bailout. This is clearly a political tactic because it broadens any Greek objections about their treatment from Germany, the Netherlands and France to the broader members of the eurozone which includes Italy, Spain, Portugal, Ireland, The UK as well as smaller countries such as Bulgaria, Croatia, Estonia and Lithuania to name a few.

Jean Claude Juncker said that this needed to be a full 28 member meeting because the Greek “issue affects everyone.” He also said that “we have a Grexit scenario, prepared in detail.”

This battle is heading toward conclusion. Grexit has its nose in front I reckon. Even though Greece has this morning submitted a proposal. You can read my wrap from Business Insider here. 

On the markets it was an extremely volatile sesion in forex and commodity markets overnight — a solid bond rally, a big dip in European stock markets and a dip then recovery in US stocks.

Key for me is the volatility and what it means for the market. As I wrote at Business Insider this morning:

There is plenty to occupy the minds of traders today. But, more than likely, risk managers are on the bridge reining in traders and fund managers and reducing positions, size and risk in the markets. What that will do is potentially increase volatility. This is how markets become fractured and unstable.

Remember Mandlebrot.

On the day

Nothing in Australia of note today.

Here’s the overnight scoreboard (7.30am AEST):

• Dow Jones up 0.53% to 17,777
• Nasdaq up 0.11% to 4,997
• S&P 500 up 0.61% to 2,081`
• London (FTSE 100) down 1.58% to 6,432
• Frankfurt (DAX) down 1.96% to 10,676 /li>
• Tokyo (Nikkei) up to 20,376
• Shanghai (composite) down 1.26% to 3,728
• Hong Kong (Hang Seng) down 1.03% to 24,975
• ASX Futures overnight (SPI September) -15 points to 5,507
• US 10 Year Bonds -3 points to 2.26%
• German 10 Year Bonds -12 to 0.65%
• Australian 10 Year Bonds down 6 points 2.96%%
• AUDUSD: 0.7444
• EURUSD: 1.0989
• USDJPY: 122.45
• GBPUSD: 1.5458
• USDCAD: 1.2705
• Crude: $52.95
• Gold: $1,155
• Dalian Iron Ore (September): 349

CHART OF THE DAY: The DAX

10,616 is the level to watch. That’s the 200 day moving average and where the DAX bounced from last night. It has to hold or a further big fall is coming.