Investing.com - Here are the top five things you need to know in financial markets on Monday, February 29:
1. PBOC cut reserve requirement ratio to maintain liquidity
The Chinese central bank (PBOC) cut the reserve requirement ratio (RRR) by 0.5% on Monday in order to maintain reasonable and amble liquidity in the financial system.
The PBOC noted that the reduction to the RRR should help to create an appropriate monetary financial environment in order to support supply side reform.
The move was not completely unexpected as rumors of action had been hinted at in the Chinese press last week.
2. G20 finance ministers stand ready, no concrete action
G20 finance ministers and central bankers agreed over the weekend to use "all policy tools – monetary, fiscal and structural – individually and collectively" to reach the group's economic goals, citing a series of risks to world growth.
While some market players say the statement could mildly underpin market sentiment, the lack of any concrete action - especially on fiscal stimulus as some had speculated - was seen as a disappointment.
A pledge in the statement to "consult closely" on foreign exchange markets was also seen by some market players as hindering a few countries from adopting flexible policy actions.
3. Euro zone registers deflation, upping pressure on the ECB
Consumer price inflation in the euro zone declined for the first time in five months in February, adding to pressure on the European Central Bank to step up measures to boost price growth in the euro area, official preliminary data showed on Monday.
In a report, Eurostat said consumer price inflation fell by a seasonally adjusted -0.2% this month, missing expectations for a gain of 0.1% and following a 0.3% increase in January. Core CPI, which excludes food, energy, alcohol, and tobacco costs increased by a seasonally adjust
4. Investors await data
In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report for February to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016.
Still on the economic docket for Monday, the U.S. is to publish reports on business activity in the Chicago region for the month of February at 14:45GMT or 11:45AM ET and pending home sales for January at 15:00GMT or 12:00PM ET.
5. Global stocks mostly lower
The Shanghai Composite Index tumbled by more than 4% in early trading to hit levels not seen since late 2014, as China’s central bank guided the yuan to its weakest level in three weeks.
Japan's Nikkei failed to maintain early gains, falling 1.0 percent to post a monthly decline of 8.5 percent, the biggest since May 2012.
European stocks tumbled with the German DAX down 1.6%, the FTSE 100 falling 0.7%, the French CAC 40 shedding 0.8%, while the European benchmark Eurostoxx 50 gave up 1.2%.
U.S. futures also point to a lower open stateside as Dow futures lost 0.5%, S&P futures traded down 0.4% and the Nasdaq futures fell 0.65%.