European stocks rise

Frankfurt/London: European stock futures advanced as investors awaited a policy meeting by the euro area’s central bank, amid speculation on the timing of a Spanish bailout. US index futures and Asian shares were little changed.

Unilever might move after people familiar with the matter said the company plans to sell a peanut butter brand. Halfords Group Plc may advance after saying profit before tax next year will be in the upper half of its previous forecast. Nobel Biocare Holding AG may move as the company said full-year profit will be affected by a deteriorating Japanese market.

Futures on the Euro Stoxx 50 Index expiring in December gained 0.7 per cent to 2,505 at 7:50am in London. Contracts on the UK’s FTSE 100 Index increased 0.4 per cent, while Standard & Poor’s 500 Index futures climbed 0.5 per cent. The MSCI Asia Pacific Index rose 0.6 per cent today.

“Traders are gearing themselves up for two days of important economic announcements,” Daniel Victory, a trader at Capital Spreads, wrote in e-mailed comments. Friday’s US payrolls data will see “either the bulls or the bears really take a stranglehold on markets that have been range-bound for the past two weeks.”

The benchmark Stoxx Europe 600 Index fell 2.7 per cent last week as Germany and France disagreed on the timing of a banking union in the euro area and concern grew that the latest round of Federal Reserve stimulus won’t be enough to spur growth in the world’s biggest economy. The gauge has still climbed 11 per cent this year.

Rate Decisions

The European Central Bank will keep its benchmark interest rate at a record low of 0.75 per cent, economists in a Bloomberg survey predicted before its monthly policy meeting in Ljubljana today. The ECB will announce the decision at 12:45pm London time, 45 minutes before its president Mario Draghi speaks at a press briefing. The ECB holds its Governing Council meeting away from Frankfurt twice a year.

The Bank of England will maintain its bond-purchase target at 375 billion pounds ($604 billion) and keep its key interest rate at 0.5 per cent, according to the median estimates of economists in separate Bloomberg surveys. The decision is due at noon in London.

Spain is seeking to sell as much as 4 billion euros ($5.2 billion) of government bonds at an auction today. Prime Minister Mariano Rajoy has refrained from seeking a bailout for the indebted country, a month after the ECB announced an unlimited bond-buying plan to bring down borrowing costs in Spain and Italy.

Oil rallies

Brent crude oil rose towards $109 per barrel on Thursday as expectations Spain would seek a bailout and better US data encouraged investors back into riskier assets such as oil and commodities.

Stock markets and the euro rallied on Thursday ahead of a European Central Bank policy meeting which is likely to keep rates unchanged and US jobs figures that were expected to show the world’s biggest economy recovering slowly.

The euro rose to a two-week high against the yen, gold gained for a fourth day and copper rallied in what traders described as a general return to risk appetite.

Brent crude for November was up 70 cents per barrel at $108.87 by 0830 GMT. The contract fell to an intra-day floor of $107.67 on Wednesday, the lowest since September 20.

US light crude oil for November rose 50 cents to $88.64 a barrel, after dropping to its lowest since Aug. 3 in the previous session.

On Wednesday, Brent dropped 3 per cent and US crude lost 4 per cent as fears a delayed recovery in China and recession in the euro zone would limit energy demand.

“There was no really convincing explanation for the fall in price yesterday,” said Carsten Fritsch, analyst at Commerzbank. “We are seeing a counter-movement, a slight counter-movement, after the exaggerated decline in price.”

Even as economic worries in Europe and China keep investors jittery, data from the US is offering hope, with private employers adding more jobs than expected in September and new orders helping a pick-up in the service sector.

This data preceded widely followed jobs numbers from the US Labour Department on Friday, which are expected to show a slight improvement from the previous month.

Employers are expected to have added 113,000 jobs to their payrolls, an increase from 96,000 in August, with the unemployment rate edging up by a tenth of a percentage point to 8.2 per cent, according to a Reuters survey.

Also supporting crude, US inventory levels unexpectedly dropped last week despite an increase in imports. Crude stocks fell by 482,000 barrels, compared with expectations for a 1.5 million-barrel increase.

In Europe, policymakers at the ECB may hold interest rates steady at Thursday’s meeting to allow time for new details on the health of the euro zone economy and for Spain to ask for aid.