Markets advance as China announces new stimulus measures

US stocks advanced on Monday as investors’ confidence was boosted by announcements of new merger deals and dovish remarks by the head of China’s central bank and new policy measures to stimulate China’s housing market. UnitedHealth Group Inc. agreed to buy pharmacy benefit manager Catamaran Corp for $12.78 billion in cash. Teva Pharmaceutical Ltd. said it would buy Auspex Pharmaceuticals Inc for $3.5 billion. China reduced required down payment for second homes to 40 percent from 60 percent and broadened a sales-tax exemption on Monday for homeowners if they sell after holding a property for two years or more. The S&P 500 and Dow Jones Industrial Average advanced 1.2% and 1.5% respectively. They had lost more than 2 % last week. Economic data indicated that US consumers barely increased spending, which rose a less-than-expected 0.1% in February. This is another sign that US economy slowed in the first quarter. Personal incomes, meanwhile, rose 0.4% in February for the fourth time in five months and the saving rate climbed for the third straight month. Pending home sales for February reached their highest level since June 2013. The ICE US dollar index, a measure of the dollar’s strength against a basket of six major currencies, ended up about 0.6% at 97.98. Today at 13:50 CET Fed’s Lockhart gives welcome at Georgia conference on Monetary Policy and Financial Stability. At 14:00 CET January Case-Shiller Home Price Index will be released. At 14:45 CET Chicago PMI for March will be released. The tentative outlook is positive for the dollar. At 16:00 CET March Consumer Confidence will be released by the Conference Board. The tentative outlook is neutral.

European stocks rose on Monday as investor optimism was bolstered by encouraging economic data, the prospect of more easing in China and sliding euro. The Stoxx Europe 600 index climbed 1.1%. Germany’s DAX 30 index rallied 1.8%, helped by weakening euro. Inflation data showed consumer prices in Germany grew 0.3% year-over-year in March, up from 0.1% in February. Economic confidence in the euro-zone rose markedly in March to the highest level since the summer of 2011. At 07:00 CET retail sales were released in Germany, showing a decline on a monthly basis for the first time since September. At 08:55 CET labor market data for March will be released in Germany. At 10:00 CET March consumer price index for euro-zone will be released by Eurostat. The tentative outlook is positive.

Nikkei fell today as investors took profits on the last trading day of the quarter and the last day of the fiscal year. Notwithstanding a sharp drop last week, the benchmark has gained 2.2 percent for the month and posted its three straight monthly gains. Yen continued the slide against the US dollar, which gained 0.8 percent vs yen on Monday for its biggest one-day rise in more than a month. Tomorrow at 00:50 CET in the morning the Bank of Japan's Tankan survey results will be published. The tentative outlook is positive.

Oil prices are falling today on expectations that a possible deal over Iran’s nuclear program could result in easing of sanctions and increased exports, exacerbating global oversupply.

Gold prices are falling after dropping for two consecutive days on Monday as stronger dollar and rising equities are dulling investor demand for the safe haven asset.