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By Bloomberg

European stocks fell for the first time in three days and Standard & Poor’s 500 Index futures signaled the gauge will drop from a record. The pound weakened after the Bank of England cut its growth forecast, oil declined and Treasuries rose.

The Stoxx Europe 600 Index slid 0.9 percent by 7:10 a.m. in New York, while S&P 500 futures retreated 0.4 percent. The U.S. 10-year yield fell two basis points to 2.34 percent and the rate on German bunds lost two basis points to 0.81 percent. The pound declined against its 16 major peers. The yen rebounded from a seven-year low after Japanese officials denied Prime Minister Shinzo Abe was considering dissolving parliament and postponing a planned sales-tax increase. Brent oil fell 0.8 percent.

More than $3 trillion has been added to the value of global equities in the past four weeks amid signs the U.S. economy is weathering a global slowdown and as central banks in Europe and Asia take steps to bolster growth. Regulators from the U.S., Britain and Switzerland fined five banks $3.3 billion in the first wave of penalties in a currency-rigging probe. Federal Reserve Bank of Philadelphia President Charles Plosser said officials now must prepare markets for sooner-than-expected increase in interest rates and the new language in the Fed’s last statement was a step in that direction.

“Maybe we’ve gone a bit too far since October,” Dirk Thiels, head of investment management at KBC Asset Management NV, said by phone from Brussels. For banks, “further litigation, provisions, and regulation will surface in the next months or years and that will really push down profitability for the banking sector,” he said.

‘Stagnation Specter’

The BOE said inflation could fall below 1 percent within months as a renewed slump in the euro area weighs on the U.K. economy. “A specter is now haunting Europe –- the specter of economic stagnation,” BOE Governor Mark Carney said.

Plosser said in a speech in London today that language added to the Fed’s last statement better shows how policy will react to economic data and “provides a start” toward offering greater clarity.

A gauge of European banks fell, contributing the most to the decline in the Stoxx 600, after U.S. and European regulators fined five banks.

Of those banks that were part of the settlement, HSBC Holdings Plc dropped 0.9 percent. UBS AG and Royal Bank of Scotland Group Plc, Citigroup Inc. and JPMorgan Chase & Co. were little changed in European trading.

Barclays Plc, which said it’s not ready to reach a settlement, declined 1.9 percent. Deutsche Bank AG, still under investigation, retreated 1.5 percent.

Daimler AG lost 1.9 percent. Reuters reported that Daimler’s Mercedez-Benz unit will recall 10,500 C Class cars in the U.S. because some cars could lose steering at low speeds.

Enel SpA fell 4.4 percent after Italy’s largest utility said third-quarter profit fell 55 percent.

Shanghai Connection

The Shanghai Composite Index climbed 1 percent to a three- year high as brokerages gained before the start of a trading link with Hong Kong. Five days before the exchange link gives foreign investors unprecedented access to mainland shares, their valuation discounts versus Hong Kong counterparts are disappearing.

The largest yuan-denominated stocks have gone from an 11 percent discount in July to a 2 percent premium yesterday, the priciest level in 14 months, according to Hang Seng Bank Ltd. Just 17 of the 68 dual-listed shares tracked by Bloomberg have lower valuations in Shanghai, versus 26 three months ago.

The ruble and the Micex Index of stocks were little changed. Russia’s currency has tumbled 29 percent this year, the second-worst performance worldwide, amid a slump in oil prices and the threat of more sanctions over support for separatists in Ukraine.

Mobilizing Forces

Ukraine’s military said yesterday the rebels battling government troops are regrouping and mobilizing forces across the country’s war-torn east.

The hryvnia gained 0.3 percent, trimming this year’s depreciation to 48 percent, the biggest drop among more than 170 currencies tracked by Bloomberg.

Oil futures in London fell for a third day amid signs OPEC members are resisting calls to lower output. The 12-member group, which next meets Nov. 27, is undecided on a production cut, Angola’s Deputy Oil Minister Anibal Octavio da Silva said yesterday. Saudi Arabia, OPEC’s largest producer, and Kuwait have signaled they’re unlikely to cut.

Brent for December settlement declined as much as 85 cents to $80.82 a barrel. The contract, which expires tomorrow, closed at $81.67 yesterday, the lowest price since October 2010. West Texas Intermediate crude dropped as much as 1.1 percent to $77.10 a barrel.

Japanese Elections

Natural gas dropped for a third day as forecasts for easing cold weather signaled reduced demand for the heating fuel. Soybean climbed as much as 2.1 percent to the highest since August.

The yen advanced 0.4 percent to 115.30 yen per dollar and added 0.7 percent to 143.38 per euro. Chief Cabinet Secretary Yoshihide Suga told reporters in Tokyo today he’s not preparing for an early election, and there was no change to the government’s stance to make a decision by the end of this year on raising the country’s sales tax.

Sterling slid 0.4 percent to $1.5858. In their Inflation Report published in London today, policy makers led by Governor Mark Carney forecast expansion of 2.9 percent in 2015 and 2.6 percent in 2016. That’s down from 3.1 percent and 2.8 percent in August.

Long-term Treasuries are the best-performing government bonds for international investors this year. Bonds due in a decade and longer have returned 18 percent in 2014 through yesterday, after accounting for both gains in the debt and a dollar rally. It’s the best return among 144 bond indexes around the world tracked by Bloomberg and the European Federation of Financial Analysts Societies.

The U.S. plans to sell $24 billion of 10-year notes today and $16 billion of 30-year bonds tomorrow.