By Stuart Wallace March 11 (Bloomberg) -- Commodities fell and the yen strengthened on increasing speculation that China, the world’s fastest-growing economy, will slow its expansion to control inflation. Stocks swung between gains and losses. Copper and aluminum dropped for a second day and oil retreated 0.1 percent at 10:22 a.m. in London. The yen appreciated against all 16 of its most traded peers, rising the most compared with the New Zealand dollar and the South African rand. The Stoxx Europe 600 Index advanced 0.1 percent and futures on the Standard and Poor’s 500 Index fell 0.1 percent. China’s inflation reached a 16-month high, industrial output climbed and new loans exceeded economists’ forecasts, as the government considers paring stimulus measures. Greece was crippled by strikes to protest reductions in Europe’s biggest budget deficit, while Mohamed A. El-Erian, co-chief investment officer at Pacific Investment Management Co., wrote in a Financial Times article that deteriorating public finances may affect the global economy more than is realized. “Chinese data today were stronger than expected and will likely add to pressure on Chinese policymakers to additionally tighten monetary policy,” said Eugen Weinberg, a commodities analyst at Commerzbank AG in Frankfurt. “Chinese demand will be robust this year, but its growth rate is likely to slow down.” Copper, Aluminum Copper for delivery in three months fell 0.7 percent to $7,390 a metric ton on the London Metal Exchange and aluminum dropped 0.4 percent to $2,223 a ton. Crude oil retreated 0.3 percent to $81.88 a barrel in New York trading. China, the engine for the world’s recovery from the deepest financial crisis since World War II, accounts for 41 percent of world demand for cotton, 36 percent for lead, 35 percent for zinc, 33 percent for aluminum and 23 percent for soybeans, according to Goldman Sachs Group Inc. The nation also consumes 9 percent of the world’s oil, the New York-based bank estimates. Consumer prices rose 2.7 percent in February from a year earlier, the National Bureau of Statistics said in Beijing, compared with the 2.5 percent median estimate of 29 economists surveyed by Bloomberg News. In Europe, basic-resources stocks fell while autos rallied. BHP Billiton Plc, the world’s biggest mining company, fell 1.5 percent in London. Lagardere SCA slumped 6.9 percent in Paris, the biggest decline in a year, after France’s biggest publisher reported earnings that missed analysts’ estimates. Bayerische Motoren Werke AG and Volkswagen AG rallied after BMW reported earnings that beat estimates and VW forecast record sales. Nikkei Rallies The MSCI Asia Pacific Index rose 0.3 percent as Japan’s Nikkei 225 Stock Average climbed 1 percent. Mizuho Financial Group Inc., the nation’s third-largest bank by market value, and Aeon Co., the biggest supermarket operator, climbed more than 1 percent in Tokyo after the Nikkei newspaper said the government will boost its economic outlook. The decline in U.S. futures indicated the S&P 500 may snap two days of gains. A report due from the Labor Department due at 8:30 a.m. in Washington may show may show initial jobless claims fell by 9,000 to 460,000 in the week ended March 6, according to the median forecast of 45 economists surveyed by Bloomberg. Devon Energy Corp. rallied 8.6 percent to $78 in German trading. BP Plc, Europe’s largest oil and gas company, will pay Devon $7 billion for assets in Brazil, the Gulf of Mexico and Azerbaijan. The yen strengthened 0.1 percent to 123.49 per euro and appreciated 0.4 percent 63.31 against the New Zealand dollar. Greek Premium The yield premium investors demand to hold Greek 10-year bonds instead of benchmark German bunds was little changed at 310 basis points, down from 396 basis points on Jan. 28, the most since the euro’s introduction. Greek hospitals, airports and schools were shut as unions staged the second general strike this year to protest Prime Minister George Papandreou’s budget cuts. Treasury 30-year yields were near the highest on record compared with two-year rates as the U.S. prepared to sell $13 billion of so-called long bonds, the last of three auctions this week. The 30-year bond yielded 4.68 percent, 3.79 percentage points more than that of the two-year note, after increasing to 3.85 percentage points on Feb. 17, the most since at least 1980, according to data compiled by Bloomberg. Companies started selling bonds at a faster pace in Europe today, with Bank of America Corp., the largest U.S. bank by assets, and London-based private-equity firm 3i Group Plc offering euro-denominated issues, according to people with knowledge of the transactions. They’re adding to the 10.9 billion euros of investment-grade debt issued since March 8, already matching the total for the whole of last week, Bloomberg data show. To contact the reporter on this story: Stuart Wallace in London at swallace6@bloomberg.net

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