* European stocks fall for 3rd day, Wall St. to open lower
* Rate expectations underpin dollar, eyes on trade data
* Sterling falls below $1.22 before UK Lords Brexit vote
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Jamie McGeever
LONDON, March 7 European stocks fell for a third
consecutive day, dragged lower by financials as shares in
Deutsche Bank slid further after its $8.5 billion cash call,
while expectations of higher U.S. interest rates supported the
Wall Street was expected to open lower, according to stock
index futures, cooling from last week's record highs as
investors prepare for an all-but-certain Federal Reserve rate
rise next week.
In Europe, a batch of weak corporate earnings and the
biggest fall in German industrial orders since the depths of the
global financial crisis added to the downbeat mood.
Europe's leading index of the top 300 shares fell as much as
0.2 percent, having earlier fallen as much as half a
percent. The region's banking index fell 1 percent.
Shares in Deutsche Bank, which has been hit by
hefty legal penalties including for the sale of toxic U.S.
mortgage debt, fell almost 3 percent to a fresh 2017 low and
were down 2 percent by 1240 GMT.
"Weak German industrial orders suggests it's not a one-way
ticket in Europe – there's been a lot of bullishness around
European equities lately but maybe this is a sign it's not all
positive. Deutsche Bank is not helping either," Neil Wilson,
senior market analyst at ETX Capital, said.
British temporary power provider Aggreko fell
nearly 14 percent and French retailer Casino Guichard
fell 5 percent after their results.
German industrial orders slumped 7.4 percent in January, the
biggest fall since January 2009 and nearly three times as steep
as the 2.5 percent fall expected by economists.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 0.5 percent, and Japan's Nikkei
closed down 0.2 percent.
The dollar rose 0.2 percent against a basket of peers.
A Fed rate hike is almost fully priced into financial
markets, so the dollar and U.S. bond yields might be vulnerable
to a correction.
But investors saw enough room to push the greenback and
yields higher on Tuesday, lifting the 10-year yield for the
fifth day in a row back above 2.50 percent and the
two-year yield up a basis point to 1.32 percent.
Sterling fell a third of a percent to a seven-week low of
Britain's House of Lords will try on Tuesday to force the
government to give lawmakers a greater say over the terms of
Britain's exit from the European Union and final approval of an
eventual deal with the bloc.
Analysts at Morgan Stanley said they expect the pound to
snap back as high as $1.45 by the end of next year.
"Sterling looks increasingly cheap in a historical context
and our FX strategists (have) recently turned more bullish on
the currency, targeting $1.28 for year end and $1.45 by the end
of 2018," they wrote in a note.
The euro dipped 0.1 percent to $1.0570 and the dollar
was marginally stronger against the yen at 113.97 yen.
"If you had told me (two weeks ago) expectations for a March
hike would reach almost 100 percent I would have said we would
have been well below $1.05," Niels Christensen, a strategist
with Nordea in Copenhagen, said.
Comments overnight by Trump administration trade adviser
Peter Navarro pulled attention back to concerns over the White
House's attitude to trade and the dollar as officials prepare
for Group of 20 meetings later this month.
Navarro said on Monday that the $65 billion U.S. trade
deficit with Germany was "one of the most difficult" trade
issues, and that bilateral discussions were needed to reduce it
outside of European Union restrictions. (Full Story)
The U.S. publishes trade balance figures on Tuesday
In commodities, U.S. oil rose 0.5 percent to $53.46 a
barrel, following Monday's 0.2 percent drop, and Brent crude
rose 0.3 percent to $56.27.
Gold slipped 0.2 percent to $1,223 an ounce.
(Additional reporting by Nichola Saminather in Singapore,
Patrick Graham, Kit Rees and Nigel Stephenson in London; Editing
by Dominic Evans and Alexander Smith)