Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

UK 100 Index called to open +5pts at 6540 having traded sideways overnight around 6550.  While yesterday’s bounce keeps the uptrend from last October alive, failure to get beyond the 6570 gap highs also keeps the downtrend from end-May intact. Which will prevail? Bulls hoping for a test of 6600 to help the uptrend win out, while Bears are watching for a return to 6400 and lower. Watch levels: Bullish 6590, Bearish 6480. 

A tepid opening call comes amid continuing chagrin in the global markets with Greece grinding its way towards an exit from the Eurozone – commentary this morning suggesting that if no deal within the next 48 hours, it’s all over, which is worrying considering that Germany sees no reason to re-start negotiations following Sunday’s ‘no’ vote – and fractures appearing in European relations with Creditors (meaning Germany) seen by many as having ‘lost the fight.’

US markets drifted lower to close negative yesterday evening while safer-haven investments were given a boost by uncertainty as US President Obama and Treasury Secretary Jack Lew pleaded with key European officials to work towards a deal that would render Greece able to resume difficult but necessary reforms and achieve debt sustainability, WITHIN the Eurozone.

Asian markets mixed overnight with Japan and Australia delivering gains following limited US losses following the Greek referendum result and a distinct lack of panic in Europe as indices finished well off their lows. Note downunder that the RBA kept rates unchanged at 2.0% and reiterated much its June statement, while in the Far East Samsung posted a Q2 profits warning.

German Chancellor Merkel says Greece is running out of time and along with her colleagues has given Greek PM Tsipras just hours to deliver acceptable reforms to creditors to keep his nation in the single currency eurozone as capital controls bite harder and the supposedly non-political lender of last resort ECB hikes collateral demands for Greek bank assistance, thus keeping the banks closed.

China back in the red (four sessions out of five) with what can now be termed the Great Fall of China resuming with gusto. Doubts about a Beijing rescue being on the cards despite more regulator intervention to prop up stocks. Measure used so far include buybacks, share suspensions, PBOC balance sheet use, IPOs suspended, interest rate cuts, lower trading costs, securities companies contributing to rescue fund. Desperation.

In focus today on the macro-front will be UK industrial and manufacturing production prints coming amid concerns that Britain is experiencing two-tier growth, with the services sector propping up an otherwise lacklustre economic recovery. See the live Macro-Calendar for a full rundown of this and the US trade balance and oil data later on.

Gold continues to be ignored falling so far out of favour despite a Greek meltdown that it is attracting the fewest number of bullish bets since 2006. Still sideways around $1170 hindered by strong USD in light of US rate rise expectations and failure to act as a safehaven so far this year while the Greek crisis has worsened.

Oil slid lower by almost 8% on Monday (biggest single day decline in over 3-months) as volatility in Chinese markets solicited continued concerns about demand from the world’s #1 basic materials  consumer. This adding to fears that an agreement in UN/Iran nuclear talks will flood the market and squeezed US frackers getting itchy drilling fingers, desperate as they are to ramp up production and garner some form of return on their investments. Brent now $57 while US cousin WTI currently $53.

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UK Company Headlines: (Source: Reuters/DJ Newswires)

• 3i Infrastructure and AMP Capital jointly buy Danish company ESVAGT
• ASOS upbeat on sales growth prospects after strong third quarter
• Robert Walters Q2 group net fee income up 11%
• Young & Co's Brewery sees Rugby World Cup to be good for trade
• SSE notes CMA's provisional findings from energy market investigation
• Howden Joinery says reached agreement with trustees on pension scheme funding
• Britain's CMA says lack of transparency hurting trust in energy sector
• Weir to snap up Delta Industrial Valves for $47mn
• Globo says Greek euro exit would effectively lower its underlying cost base
• Smiths Group names Andrew Reynolds Smith as new CEO