Dollar Falls Before CPI Data; European Shares Pare Gain

(Bloomberg) — The dollar weakened against most other currencies before data forecast to show a decline in U.S. consumer prices. U.S. equity futures rose and oil climbed for a third day, while European shares erased gains.

The Bloomberg Dollar Spot Index slid 0.2 percent, marking the sixth decline in seven days, as of 6:52 a.m. in New York. Futures on the Standard & Poor’s 500 Index added 0.2 percent, while the Stoxx Europe 600 Index was little changed. Germany’s 10-year yield fell two basis points to 0.21 percent. Oil rose 0.7 percent in New York and copper reached an 11-week high.

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U.S. economic data later today is forecast to show that consumer prices fell 0.1 percent in February, matching the decline from the previous month, which was the weakest since 2009. St. Louis Federal Reserve President James Bullard said at a conference in London that U.S. growth will rebound in the second quarter. He also said conditions were set for the central bank to normalize interest rates this year.

“In the shorter term, the dollar will struggle,” said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London. “The market expectation for the Fed has widened — some still suggest June, whilst others looking for no change until early January. Its really not clear when.”

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The dollar fell against 14 of its 16 most-traded counterparts, sliding 0.3 percent against the yen. San Francisco Fed President John Williams, who votes on policy this year, said in remarks prepared for delivery in Sydney Tuesday that a discussion should happen mid-year about tightening policy, even as he lowered his economic growth forecast.

Airplane Crash

Airbus Group NV shares slid 2 percent in Paris trading. An Airbus A320 single-aisle aircraft has crashed in southern France, local police said. The aircraft went down in the Digne region that is about an hour north of Marseille.

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West Texas Intermediate futures advanced 0.9 percent as the weakening dollar made commodities priced in the currency more attractive to investors. U.S. crude stockpiles probably expanded for an 11th week through March 20, increasing by 4.75 million barrels, according to a Bloomberg News survey before a report from the Energy Information Administration on Wednesday.

The Stoxx 600 rose as much as 0.4 percent earlier Tuesday. A Purchasing Managers Index for the manufacturing and services industries across the euro-region rose to 54.1 from 53.3 in February, Markit Economics said.

The Netherlands is selling a minimum of 5 billion euros of securities due in 2025 with a coupon of 0.25 percent, the lowest on record for euro-denominated 10-year sovereign debt.

Bond Yields

The yield for the Bank of America Merrill Lynch Global Broad Market Sovereign Plus Index slid to 1.10 percent as of Monday from 1.33 percent at the end of last year. It was 1.08 percent on Feb. 2, a record low based on data starting in 1996.

Greece’s ASE Index added 2 percent. German Chancellor Angela Merkel met Prime Minister Alexis Tsipras, encouraging him to follow the path set out by Greece’s creditors and saying his country belongs in Europe. Billionaire investor George Soros said the chances of Greece leaving the euro area are now 50-50.

The cost of insuring corporate debt rose for a ninth day, with the Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade borrowers up one basis point to 58, according to data compiled by Bloomberg. The average yield on high-grade bonds in euros rose to 0.94 percent, up from a record low of 0.85 percent on March 10, Bank of America Merrill Lynch index data show.

Chinese stocks eked out their longest winning streak in 23 years, with turnover climbing to a record amid volatile trading, as investors bet weaker-than-estimated manufacturing data will spur further monetary stimulus.

The Shanghai Composite Index added 0.1 percent, erasing a loss of as much as 2.4 percent. The gauge has risen 12 percent during the 10-day rally, the longest winning streak since May 1992. Copper rose 0.3 percent in London, paring gains after a rally that reached 1.4 percent.

The preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 49.2, missing the median estimate of 50.5 in a Bloomberg survey and down from February’s 50.7. Numbers below 50 indicate contraction.

To contact the reporters on this story: Lynn Thomasson in London at [email protected]; Roxana Zega in Zurich at [email protected]

To contact the editors responsible for this story: Lynn Thomasson at [email protected] Stuart Wallace

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