GLOBAL MARKETS: European Stocks To Start Down; Greece Still In Focus

--Caution remains despite Greek debt swap deal
--China trade deficit also causes jitters
--Euro slightly weaker versus dollar; all eyes on finance ministers' meeting


LONDON (Dow Jones)--European stocks are expected to start in the red Monday, after the International Swaps and Derivatives Association declared Friday a credit event occurred with Greece's debt, which will likely trigger a net $3.2 billion in payouts between buyers and sellers of credit default swaps on Greek sovereign credit.

In addition, Asian equity markets are trading in the red overall after China posted a surprisingly high $31.48 billion trade deficit for February, following a $27.28 billion surplus in January.

These issues overshadowed better-than-expected nonfarm payrolls data, issued Friday. U.S. stocks closed with modest gains on Friday, with the Dow Jones Industrial Average ending up 0.1% at 12,922.02 and the S&P 500 0.4% higher at 1370.87.

"The stronger than expected U.S. February jobs report and the Greek private sector involvement debt swap should by all rights have set a positive tone to markets this week," said Credit Agricole Corporate & Investment Bank in a note.

"Unfortunately this is not the case and caution is set to prevail. Officials in Europe are set to finalize Greece's second bailout today but market sentiment is unlikely to be boosted as various concerns creep into the market. Growing skepticism about the fact that the Greek bailout fails to correct the country's underlying problems, worries about whether Portugal will follow in Greece's wake, fiscal slippage in Spain and the Irish referendum, all point to ongoing tensions in the weeks ahead."

European finance ministers are expected to meet around 1600 GMT Monday to approve Greece's second bailout deal.

Jonathan Sudaria, night dealer at Capital Spreads, calls London's FTSE 100 to start down 18 points at 5869, Frankfurt's DAX 23 points lower at 6857 and Paris's CAC 40 down 13 at 3474.

Asian stock markets were mostly lower Monday as investors continued to fret over China's growth outlook and Greece's debt situation, keeping financials and most resources stocks on the back foot, though a weaker yen lifted exporters in Japan.

Japan's Nikkei Stock Average fell 0.4%, Australia's S&P/ASX 200 was down 0.4% and South Korea's Kospi Composite declined 0.8%. Hong Kong's Hang Seng Index lost 0.3%, while China's Shanghai Composite fell 0.2%.

In foreign exchange markets, the dollar was well supported as Friday's jobs report diminished expectations of further easing steps from the Federal Reserve. But the ISDA's decision kept the euro under pressure.

At 0715 GMT, the single currency was at $1.3105 against the greenback, from $1.3122 late Friday in New York. The dollar was at Y82.24, from Y82.44.

Spot gold was at $1,705.60 per troy ounce, down $6.50 from its New York settlement on Friday. April Nymex crude oil futures were down $0.63 at $106.77 per barrel and Brent oil futures were down $0.55 at $125.43. The June bund contract was up 0.11 at 138.59.