Bloomberg Business
-China FX reserves stabilize: China’s foreign-exchange reserves fell at a slower pace last month as the nation’s financial markets stabilized and policy makers took more steps toward shoring up growth. The world’s largest currency hoard dropped by $28.6 billion to $3.2 trillion in February, the smallest decline since June, and less than the $40.9 billion decrease expected by economists surveyed by Bloomberg. Meanwhile, researchers at the Bank for International Settlements found in a paper that recent outflows from China were likely the result of Chinese corporates paying dollar debt as opposed to capital flight.
-All eyes on Mario Draghi: The European Central Bank will meet this week in a gathering widely expected to result in further stimulus measures. The big questions being how big and in what form? Economists in a Bloomberg survey are nearly unanimous in predicting action. The results of the poll signal what officials might have to deliver if they want to avoid a repeat of December, when a tweak to stimulus underwhelmed investors and sparked a market selloff. Just three months on, with consumer prices falling again and the outlook worsening, the central bank faces a critical test of its credibility.
-Chinese taxes: China is planning to overhaul its tax system in a bid to boost consumer demand, which is seen as a weak link in the economy. Finance Minister Lou Jiewei says the government is planning to create more income tax deductions to help families out with such things as education expenses, raising children and mortgage interest. Meanwhile, iron ore is surging on China’s overall plans to continue stimulating its economy.
-A mixed morning in markets: Shares in Europe fell, while the dollar and German bonds climbed, as investors assessed the impact of China’s growth plans as well as the potential for European Central Bank stimulus measures this week. The Stoxx 600 was down 0.80 percent as of 6:07 a.m. in New York, while the Shanghai Composite was up 0.81 percent. Meanwhile, oil has advanced to its highest level in two months and iron ore jumped 19 percent to $63.74, its biggest one-day gain on record.
-On the campaign trail: Hillary Clinton echoed some of Bernie Sanders’ outrage in last night’s Democratic debate, joining calls for Michigan’s governor to resign over the Flint water crisis. Both candidates criticized America’s fracking industry, but sparred over U.S. trade agreements and the auto industry bailout, with Clinton saying the American auto industry would have collapsed if Sanders had succeeded in blocking its rescue.
CNN Money
– Gushing oil: Crude oil futures are rising by about 2%, trading around $36.50 per barrel. Oil prices have risen by roughly 40% since February 11, erasing nearly all the losses seen earlier this year. Stocks have been heavily correlated with oil over the past few months, but the link isn’t so evident Monday. Nearly all European markets are in the red in early trading, and Asian markets ended the day with mixed results.
– China in the spotlight: Economists and investors are closely monitoring developments in Beijing, where China’s annual National People’s Congress is taking place. The Chinese government this weekend set an economic growth target range of 6.5% to 7% for this year. The lower end of the range marks a slowdown from previous years when the country experienced breakneck growth rates.
-Stock market movers — DuPont, Fastjet: Shares in DuPont (DD) are rising in extended trading after Bloomberg reported that Germany’s BASF (BASFY) is considering making a bid for the company. DuPont agreed in December to a multi-billion dollar merger with Dow Chemical (DOW). It looks like BASF is trying to spoil the party. Shares in African low-cost airline Fastjet are plunging by about 35% in London trading after the company warned it would deliver worse-than-expected results in 2016. «The group no longer expects to be cash flow positive for the year,» it said in a statement, adding that it may have to raise cash from investors.
-Earnings: Burger chain Shake Shack (SHAK) and retailer Urban Outfitters (URBN) are reporting earnings after the close.
– Weekly market recap: March has begun with a bang. The main market indexes have been rallying since the beginning of the month, and over the course of last week the Dow Jones industrial average rose 2.2%, the S&P 500 jump 2.7% and the Nasdaq grew 2.8%.