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

UK 100 called to open -5pts with Asia-Pacific shares starting the week on the back foot, concerned by the faltering of the global growth engine (all that bad manufacturing data from last week) and Europe’s long-running debt crisis (no elaboration needed) – both denting sentiment. Nonetheless, the US dollar has not seen big flows into the safe-haven currency, allowing commodities such as Gold, Silver and the Oils (US Light and Brent crude) to bounce off their lows.

The single currency Euro remains weak, likely on scepticism that his week’s summit (Thurs-Fri) will offer no concrete measures to help with the sovereign debt crisis. There will, however, be focus on a potential banking union and the agreement between Germany, France, Italy and Spain on a €130bn growth package (an idea, details absent). There will also surely be more discussions regarding fiscal integration and mutualised debt (euro bonds) to ease the burden on the troubled sovereigns. Could Merkel be coming round to the idea? Does she have any choice?

After the first phase of the independent review of its battered banking sector, it is expected that today will see Spain request (formally) aid for its banks, kicking off a week of negotiations ahead of the summit. While the informal request was for €100bn, the formal request may be more like €62bn. Some solace?

After the good news that Greece had formed a coalition quickly and without much fuss, it is ironic that both its new Prime Minister (Samaros) and Finance Minister (Rapanos) have been hospitalised (detached retina and collapse, respectively) and unable to attend the summit. This has also see the troika (ECB, IMF and EU) postpone their visit to check on progress of bailout programme of austerity.

Macro data very US-focused, with regional manufacturing and New home Sales.

For the rest of the week, data likely to show economic fragility in Europe with German unemployment stagnant and UK Q1 GDP confirming a 0.3% contraction and a technical recession (2 consecutive quarters of contraction/negative growth). European sentiment likely to have remained in the doldrums. All data being looked to for reasons central banks may pull the trigger on more QE (quantitative easing, money printing).

Overnight Macro Data: (Source: Reuters/DJ Newswires)

• N/A
• See Live Macro calendar for all details

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

• Spectra Systems says unaware why share price has fallen
• Great Eastern Energy upgrades reserves
• AFC Energy to build UK’s largest fuel cell facility
• Essar Energy gets clearance for Mahan coal block
• Regus to open centres at motorway service areas
• Int’l Power refinances Australian debt facilities
• Vedanta gets shareholders’ nod for India merger plan
• Premier Oil says Benteng well encouraging, Coaster is dry hole
• Kier says trading in line, order books robust
• Anglo American and Codelco extend talks to July 17
• Valiant Petroleum says Tryfan well is dry hole
• Thailand’s PTT says extends offer for gas explorer Cove Energy

Morning Press Selection:

• MPC member wants £50bn easing – FT.com – UK Economy http://on.ft.com/LKfa4A
• Greek lenders postpone mission to Athens – FT.com – EU Economy http://on.ft.com/Ls5GwF
• World economy caught in ‘vicious cycle’ – FT.com – Global Economy http://on.ft.com/MIWotW
• China moves to lift property market – FT.com – Chinese Economy http://on.ft.com/MH9VEe
• Why Mario Monti needs to speak truth to power – FT.com – Columnists http://on.ft.com/NzPv0E
• Youth employment is bad – but not as bad as we’re told – FT.com – Opinion http://on.ft.com/MIVTQO
• US companies talk down earnings prospects – FT.com – US & Canadian Companies http://on.ft.com/L8An7j