Bonds fell, sending U.S. 10-year Treasury yields to an almost three-month high, on speculation the Federal Reserve will put off more stimulus measures. European stocks pared declines, while Standard Chartered Plc climbed after settling a money-laundering probe. The yield on 10-year notes rose as much as five basis points to 1.79 percent and was two basis points higher at 8:45 a.m. in New York. The Stoxx Europe 600 Index slipped less than 0.1 percent, paring declines of as much as 0.6 percent. Standard & Poor’s 500 Index futures dropped 0.2 percent. The euro weakened against all but one of its major peers. Natural gas dropped 1.5 percent and nickel slipped 1 percent. The cost of living in the U.S. was little changed in July for a second month, compared with a forecast for a 0.2 percent increase in a Bloomberg survey, and manufacturing in the New York area unexpectedly contracted in August, according to data from the Labor Department and Fed Bank of New York. Data yesterday showed American retail sales grew more than forecast last month. The Fed will hold off from a third round of bond- buying, known as quantitative easing, in September amid better economic figures, Goldman Sachs Group Inc. said in a report. “Yields are rising as expectations for more stimulus are being pushed back,� said Marc Ostwald, a fixed-income strategist at Monument Securities Ltd. in London. ‘‘U.S. data aren’t suggesting growth at breakneck speed but neither is it pointing to a downturn.’’ German bunds and U.K. gilts declined. Germany’s 10-year yield climbed as much as four basis points to 1.51 percent, surpassing 1.5 percent for the first time since July 4. The rate of similar-maturity British notes jumped to 1.65 percent, the highest since July 6. Default Risk The cost of insuring European corporate debt rose from a five-month low, with the Markit iTraxx Crossover Index of credit-default swaps on 50 mostly junk-rated companies increasing six basis points to 580. The euro dropped 0.3 percent to $1.2283 and 0.4 percent against the yen. The Stoxx 600 (SXXP) retreated from its highest level since March 19, led by mining companies after a director at Vale SA, the world’s biggest iron-ore producer, said that China’s “golden years� are behind it. Eurasian Natural Resources Corp. slid 6.6 percent as the Kazakh metal producer posted a 60 percent slump in first-half profit. Stock markets in Italy, Greece, Austria and Luxembourg were closed for public holidays today. Standard Chartered Standard Chartered gained 4.2 percent after it agreed to pay $340 million to settle a probe by New York regulators into allegations it helped funnel Iranian money into the U.S. The regulator had threatened to strip the lender of its license to operate in the state. The drop in U.S. futures indicated the S&P 500 will fall for a third day. Deere & Co. slid 4.5 percent in pre-market trading after the largest maker of farm equipment cut its full- year earnings forecast after fiscal third-quarter profit that trailed behind estimates. The MSCI Emerging Markets Index (MXEF) fell 0.4 percent. The Shanghai Composite Index slid 1.1 percent and Russia’s Micex Index lost 1.7 percent. Markets in India, South Korea and Poland were closed for holidays. To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net

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