By Justin Carrigan Sept. 23 (Bloomberg) -- The dollar fell and German bunds declined after a surprise rebound in New Zealand’s economy underpinned evidence that the global recovery is accelerating. European stocks, U.S. index futures and metals gained. The U.S. currency weakened against 14 of the 16 most-traded currencies tracked by Bloomberg as of 10:07 a.m. in London. The 10-year bund dropped for an eighth day, its longest losing streak in more than two years. The MSCI World Index of 23 developed nations rose 0.2 percent. Futures on the Standard & Poor’s 500 Index also advanced 0.2 percent. New Zealand’s dollar climbed to a 13-month high after the government said gross domestic product unexpectedly expanded for the first time in six quarters. The Federal Reserve may signal today that the U.S. economy has started to recover, while maintaining its pledge to keep benchmark borrowing costs near record lows to bolster growth. “Our view is cautiously optimistic about the global economy,” said Christopher Iggo, London-based chief investment officer for fixed income at Axa Investment Managers Ltd., which oversees about $821 billion. “We strongly believe that all the policy stimulus that’s been thrown in the world economy is starting to work and has been somewhat successful.” The yield on the German bund rose 2 basis points to 3.41 percent as gains in stocks sapped demand for the safety of fixed income. The bund hasn’t declined for eight consecutive days since June 28, 2006. The Dollar Index, which tracks the currency against those of the U.S.’s biggest trading partners, dropped as much as 0.3 percent, pushing it below 76.00 for the first time since Sept. 22. Pound Gains The pound rose 0.4 percent against both the dollar and the euro after the Bank of England’s minutes showed Governor Mervyn King agreed with the decision by fellow policy makers not to expand the asset-purchase plan beyond 175 billion pounds ($287 billion) at their Sept. 10 meeting. Fed policy makers are meeting as analysts project 2.9 percent growth for the U.S. economy in the quarter ending this month, compared with a 1 percent estimate in July. The U.S. government and the Fed have spent, lent or committed more than $12 trillion in a bid to revive the economy and credit markets. “The economic rebound will be sharper and last longer than we previously anticipated,” Barclays Capital analysts Michael Gavin and Pierro Ghezzi wrote in a report today. “Our confidence in the global economic recovery has grown.” Stocks Rise The Dow Jones Stoxx 600 Index of European shares rose for a second day, adding 0.4 percent. A 55 percent increase since March 9 has driven valuations on the gauge to 47.4 times reported profit, the highest level since June 2003, weekly Bloomberg data show. The rise in U.S. futures indicated the S&P 500 may extend gains that have driven it to an 11-month high. The 58 percent rebound in the index from its 12-year low on March 9 has pushed valuations to almost 20 times the reported earnings from continuing operations of its companies, the highest level since 2004, according to weekly data compiled by Bloomberg. The Baltic nations led gains in emerging-market stocks after the Estonian government accepted an offer to sell its 27 percent stake in AS Eesti Telekom, its biggest phone company, to TeliaSonera AB of Sweden. Russia’s Micex Index rose 1.5 percent and Poland’s WIG20 Index was 1.4 percent higher after UBS AG said Europe, Middle East and Africa would lead earnings growth among developing nations next year. “The combined forces of earnings upgrades and more resilient margins have so far supported equity returns,” UBS AG analysts Jeffrey Palma and Stephen Mo wrote in a report today. They predicted earnings in emerging markets will rise 30 percent in 2010, after an 11 percent decline this year. Carbon Permits European Union emission permit prices fell after Poland and Estonia won separate appeals at an EU court against limits on pollution by energy companies and manufacturers in the EU’s emissions-trading system, the world’s largest greenhouse gas market. EU carbon permits for December declined 3.5 percent to 13.26 euros a metric ton in London trading, their lowest intraday price since July 8. Copper fell for the first time in three days on the London Metal Exchange, sliding 0.9 percent to $6,213 a metric ton, on concern that Chinese imports of the metal will continue to slow. Gold rose for a second day, climbing 0.2 percent to $1,016.57 an ounce. New bond sales from Lloyds Banking Group Plc, the U.K.’s biggest mortgage lender, and the financial unit of Volkswagen AG restarted Europe’s 2.2 trillion-euro asset-backed securities market that had been shut since the start of the credit crisis. Volkswagen Financial Services AG, part of Europe’s biggest automaker, started selling 475 million euros ($703 million) of bonds backed by car leases the first issue of its type since September 2008. Lloyds’ HBOS Plc unit began offering investors part of a 3.6 billion-pound ($5.9 billion) issue, the first public sale of bonds backed by U.K. mortgages since May 2008.

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