Here's your 20-second guide to what Australian traders will be talking about this morning

A joint investivation between the AFP & ASIC has led to arrests for Getty/Chris Hondros

– Greek PM Alexis Tsipras once again urged his countrymen to vote “no” in this weekend’s referendum. Tsipras and his finance minister Varoufakis continue to play a little fast and loose with news that Greece has written to the EU largely accepting the deal that was on the table before last weekend’s walk out. That buoyed traders on Europe’s stock exchanges. But German finance minister Wolfgang Schaeuble once again said no deal is possible until after the referendum. Comments early this morning (AEST) from Varoufakis suggest the walkout and referendum may be an attempt at a circuit breaking stunt. Varoufakis said that the government objective is to have a deal with creditors on Monday and that the banking situation “will return to normal soon after a deal is reached” because the ECB will “raise the ELA again and liquidity will be restored”. He’s trying to support the “no” vote by suggesting, as the PM did overnight, that it will actually strengthen the Greek’s hand at the negotiating table. These guys are like quicksilver.

– Probably more important for traders, especially forex traders, was the strength of the data out of the US last night. It highlighted once again, if any fresh reminders were necessary, that current rate settings in the US — at zero — are incompatible with the recovery in the labour market. Akin Oyedele from Business Insider US reports:

US economic data was plenty. Private payrolls grew by 237,000 in June (218,000 expected) the highest since December 2014, according to ADP. The May print was revised upwards to 203,000 from 201,000. Mark Zandi, chief economist of Moody’s Analytics, said in the release, “The US job machine remains in high gear. The current robust pace of job growth is double that needed to absorb the growth in the working age population.”

There was also another solid auto sales report which printed an annualised 17.1 million rate. The ISM was also stronger than expected at 53.5, while the Markit manufacturing PMI beat expectations with a print of 53.6. Construction spending was also higher.

– The wash up was that the US dollar surged and US stocks rallied. But stocks were down from the highs of the day, made early when hopes of a Greek deal were strongest. From a technical perspective the S&P 500 has respected the 200-day moving average that it touched earlier this week. That remains the key for a number of traders. Traders respect levels unless or until they break. Here’s the chart.

Here’s the overnight scoreboard (7.02am AEST):

  • Dow Jones up 0.79% to 17,757/li>
  • Nasdaq up 0.53% to 5,013
  • S&P 500 up 0.69% to 2,077
  • London (FTSE 100) up 1.34% to 6,608
  • Frankfurt (DAX) up 2.15% to 11,180
  • Tokyo (Nikkei) up 0.46% to 20,329
  • Shanghai (composite) down 5.23% to 4,053
  • Hong Kong (Hang Seng) up 1.09% to 26,250
  • ASX Futures overnight (SPI September) -1 point to 5,475
  • US 10 Year Bonds +6 points to 2.42%
  • German 10 Year Bonds +4 to 0.81%
  • Australian 10 Year Bonds +8 points to 3.10%
  • AUDUSD: 0.7642
  • EURUSD: 1.1049
  • USDJPY: 123.16
  • GBPUSD: 1.5612
  • USDCAD: 1.2586
  • Crude: $56.85
  • Gold: $1,168
  • Dalian Iron Ore (September): 414

– On the local market yesterday traders defied the weak lead from the previous night’s futures and took prices around 1% higher. The question on trader’s minds this morning was whether the move in our timezone pre-empted the offshore moves overnight or whether Australian stocks should rally again today. Futures are flat and not offering too much in the way of a lead so the level traders will be watching is 5,552.

– In Asia yesterday there was fresh evidence that the weaker Yen and Abenomics are working in Japan. The tankan survey was pretty solid with a strong Capex component. That helped lift the Nikkei. In Shanghai, prices weren’t doing too badly until the last two hours of trade when they crashed to close at 4,054 for a loss of 5.22%. Part of this has been blamed on somewhat disappointing PMI’s but they were released earlier in the day. One thing to note was the World Bank issued a report which on the one hand supported government efforts to underpin the stock market but also warned that “financial reform will only prove effective if it removes the distorted incentives and poor governance structures that have affected how financial resources are mobilised and allocated.” That means “a fundamentally reconfigured role of the state in the financial system is essential.”

– On forex markets the US dollar has regained the ascendancy and everything, including the Yen, was weaker overnight. Euro, having filled the gap created by Monday morning’s fall is now heading lower again, as is Sterling and the Canadian dollar, which has been thumped this week. The Kiwi keeps making new five year lows while the Aussie is doing slightly better but is back into the mid 76 cent region.

– On commodity markets nymex crude tanked overnight and is nearing the bottom of the recent multi-month trading range. The falls were prompted by the first rise in US stockpiles in two months. Gold was lower again and is nearing two month lows. Copper rallied a little to $2.63 and Dalian September iron ore is at 414.

– On the data front today we get trade in Australia and tonight we get EU PPI but the highlight is the release of US non-farm payrolls a day before the 4th of July holiday when markets in the US will be closed.

And now from CMC Markets’ Ric Spooner is today’s Stock of the Day

Westpac

Bank stocks are likely to be a good reflection of whether the wider market now recovers from the latest European risk episode.

Westpac is showing early signs of forming a base around Wednesday’s low. This could be a rejection of the 78.6% Fibonacci level which is a common retracement level.

It’s still possible that the market could drift back to this zone of support around this Fibonacci level at $31.60 over the next few days before rejecting it. However, if instead, Westpac keeps rallying from current levels; recent price action is going to start looking very like bullish head and shoulder pattern. This would ultimately be completed by a break through the neck line around $33.90.

Ric Spooner, chief market analyst, CMC Markets

You can follow Ric on Twitter @ricspooner_CMC

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