Investing.com - Here are the top five things you need to know in financial markets on Monday, February 15:
1. Chinese imports, exports fall more than forecast in January
The latest trade figures out of China added to concerns over the health of the world's second-biggest economy.
Chinese exports in yuan-denominated terms slumped 6.6% from a year earlier in January, disappointing forecasts for a gain of 3.6%, while imports sank 14.4%, missing expectations for a rise of 1.8%. That left the Asian nation with a surplus of 406 billion yuan.
In dollar-terms, exports tumbled 11.2% in January, far worse than forecasts for a decline of 1.9%, while imports dropped 18.8%, compared to expectations for a fall of 0.8%, leaving China with a record trade surplus of $63.3 billion last month.
The disappointing data reinforced the view that the economy remains in the midst of a gradual slowdown which will require Beijing to roll out more support in coming months.
Chinese stocks fell modestly on Monday, catching up with recent losses in global equity markets, as mainland markets reopened following the week-long Lunar New Year holiday. The Shanghai Composite Index closed down 0.6%.
On the currency front, China's yuan hit a 2016-high against the greenback during the session, after the PBOC set its official midpoint rate sharply stronger and after central bank governor Zhou Xiaochuan said there was no basis for the currency to keep depreciating.
2. Japan's economy contracts 1.4% in fourth quarter
Japan's economy contracted in the fourth quarter, as weak consumer demand and slower exports battered the recovery.
Data released before the Tokyo market opened showed that Japan's economy contracted at a 1.4% annualized rate in the October-to-December quarter, worse than expectations for a 1.2% contraction. On a quarter-on-quarter basis, the economy shrank 0.4% in the final three months of 2015.
The weak data added to pressure on the Bank of Japan to step up monetary easing measures to shore up growth.
Despite the lackluster report, Tokyo’s Nikkei 225, soared 7.1%, boosted by weakness in the Japanese yen and prospects that policymakers will enact further stimulus measures.
3. European stocks rally as Italian banks soar
European stock markets rallied sharply on Monday, with Italian banking stocks leading gains, as investors regained their bullishness and moved back into riskier assets.
Germany’s DAX 30 surged 2.65% by 10:35GMT, or 5:35AM ET, France’s CAC 40 jumped 3.15%, London’s FTSE 100 rose 1.95%, while Italy’s FTSE MIB surged 3.6%.
Italian banks soared on a report that the European Central Bank is in talks with the Italian government about buying bundles of bad loans from the country’s lenders as part of its asset-purchase scheme and accept them as collateral.
Italian banks, which have been among worst performers during this year’s selloff in the financial sector, have approximately €200bn of bad loans.
Trading volume is expected to lighter than usual as U.S. trading is closed for the President’s Day holiday.
4. Oil prices hold gains after Friday’s 12% surge
Oil prices pushed higher on Monday, after scoring its biggest one-day gain in seven years on Friday, as investors were hesitant to bet on lower prices amid a renewed possibility of coordinated production cuts.
U.S. crude was last up 33 cents, or 1.12%, at $29.78 a barrel, while Brent rose 30 cents, or 0.93%, to $33.66.
Global oil prices surged more than 12% on Friday after a report once again suggested OPEC might finally agree to cut production to reduce the world glut.
5. Gold drops $30 as market sentiment improves
Gold futures fell sharply on Monday, as the metal’s safe-haven appeal was dampened amid a recovery in global equity markets.
Gold lost $30.60, or 2.47%, to trade at $1,208.80 a troy ounce. Prices of the yellow metal soared to a one-year high of $1,263.90 last Thursday, boosted by a flight to safety.
Gold futures have been well-supported in recent weeks amid indications global economic and financial headwinds could make it tough for the Federal Reserve to raise interest rates as much as it would like this year.