Commodities crushed, Oil tanks, Stocks do okay

Quick Recap

Commodities were the big mover overnight as the reverberations of the break in oil yesterday and concerns over Greece and China hit prices hard.

There  a massive fall in Nymex crude after it broke recent support. Prices fell 7.47% in the front month to $52.68 a barrel. Copper also fell heavily hitting a five month low after dropping 9.15 cents a pound to $2.53. Other base metals were also lower, while iron ore was hammered again. Dalian iron ore is at 380 this morning while the September 62% futures contract in the US fell $3.10 to $46.88!

Stocks did relatively well though all things considered and in the end European stock markets were lower but they didn’t crash in the way that futures suggested they might at one stage yesterday morning. The interesting price action in the washup of Europe was the FTSE MIB in Milan which fell 4%. As I highlighted at Business Insider this morning, “That’s the trouble with Greece — if it folds, if it defaults, or if it leaves the Euro, traders, and perhaps populations, will just wonder who is next.”

In the US stocks had a big dip but recovered then fell then recovered again. So, even though the S&P 500 fell down and through the 200-day moving average at one point it rallied and closed above it. That’s a good short term sign but the outlook has shifted.

Forex markets reacted to the Varoufakis resignation news yesterday afternoon but were oitherwise quiet.

We await China today, the EU meeting tonight and Aussie dollar traders will no doubt get a chance at some action around 2.30pm this afternoon.

ON GREECE:

We are still waiting for the meeting tonight of the EU leadership but while the politicians brawl it’s left to the ECB to try to hold Europe together. This morning Reuters reports ECB governing council member Ewald Nowotny said bridge funding to Greece, while a new bailout program is being negotiated, “is something that has to be discussed.” But he did say that more financing can’t be provided if Greece defaults on its debt.

On the day

On the data front today we have the AiGroup performance of construction index, ANZ weekly consumer confidence and then the RBA at 2.30pm AEST. Tonight it’s German industrial production, French trade, UK industrial production and then US trade.

Here’s the overnight scoreboard (8.57am AEST):

• Dow Jones down 0.26% to 17,683
• Nasdaq down down 0.34% to 4,991
• S&P 500 down 0.39% to 2,068
• London (FTSE 100) down 0.76% to 6,535
• Frankfurt (DAX) down 1.52% to 10,890 /li>
• Tokyo (Nikkei) down 2.1% to 20,112
• Shanghai (composite) up 2.42% to 3,776
• Hong Kong (Hang Seng) down 3.18% to 25,236
• ASX Futures overnight (SPI September) +19 points to 5,450
• US 10 Year Bonds -9 points to 2.29%
• German 10 Year Bonds -3 to 0.77%
• Australian 10 Year Bonds flat 2.92%%
• AUDUSD: 0.7490
• EURUSD: 1.1054
• USDJPY: 122.59
• GBPUSD: 1.5600
• USDCAD: 1.2644
• Crude: $52.86
• Gold: $1,169
• Dalian Iron Ore (September): 380.5

CHART OF THE DAY: US Oil

It’s broken down and through our box and then some with a massive fall overnight. I got stopped out of my short on the open yesterday – for a solid profit but missed out on the next leg lower.

Dang I hate Monday Asia some weeks.

Anyway – not sure when but this looks like it’s heading toward $45 a barrel.