U.S. and Euro Index Futures Climb With Dollar ; Crude Gains

U.S. and European stock-index futures gained with the dollar and industrial metals as U.S. lawmakers indicated they’re open to a short-term increase in the debt ceiling. Crude oil climbed after Libya’s prime minister was taken by a revolutionary group.

Standard & Poor’s 500 (SPX) index futures added 0.5 percent by 7:02 a.m. in London, after the gauge snapped a two-day drop in New York. Euro Stoxx 50 contracts rose 0.8 percent while the MSCI Asia Pacific Index was little changed. The Bloomberg U.S. Dollar Index gained 0.2 percent and copper rallied 0.4 percent from the biggest drop in five weeks. Brent increased 0.7 percent after a Libyan official said Prime Minister Ali Zaidan was taken from a Tripoli hotel this morning.

House Republican and Senate Democratic leaders in the U.S. are open to an increase in the $16.7 trillion debt ceiling, according to congressional aides. Rates on Treasury bills due Oct. 17, the day the U.S. reaches its borrowing capacity, held at 0.49 percent after surging the past five days. In Europe, economists expect the Bank of England to leave interest rates unchanged today, while reports may show French and Italian industrial production climbed in August.

“It’s just not very likely the political gridlock will persist because the fallout could be catastrophic to the U.S. and the world economy,” Donald Williams, the Sydney-based chief investment officer at Platypus Asset Management Ltd., which oversees about A$1.6 billion ($1.5 billion), said by phone. “But having said that, the market is uncertain until this is resolved and so we’ve got choppy trading conditions ahead for the next week or so.”
S&P Gain

The S&P 500 index rose 0.1 percent in New York yesterday after sliding more than 2 percent over the previous two sessions, its worst two-day drop since June. The Bloomberg U.S. Dollar Index, a gauge of the currency versus 10 major peers, extended a 0.3 percent gain yesterday.

Brent oil in London climbed to $109.78 a barrel and West Texas Intermediate in New York was 0.5 percent higher. Libya’s Zaidan was taken from the Corinthia hotel by a group called Libya Revolutionaries Operations Room, according to Hashem Beshr, head of the Supreme Security Committee for Tripoli.

“Zaidan is still with them,” said Beshr by phone from Tripoli. The group arrested Zaidan based on wrong information that the Public Prosecutor had an arrest warrant, he said. The cabinet has called an urgent meeting.
Asian Shares

About 500 stocks rose as some 330 fell on the MSCI Asia Pacific Index. BHP Billiton Ltd., the world’s biggest mining company, slid 0.6 percent and Cnooc Ltd., China’s biggest offshore oil producer, slipped 1.4 percent, leading raw material companies on the index lower.

Takeda Pharmaceutical Co. jumped 3.3 percent and Astellas Pharma Inc. gained 3.8 percent in Tokyo to lead health care stocks higher. Mazda Motor Corp., which gets 30 percent of sales in North America, added 2.4 percent.

Hong Kong’s Hang Seng Index lost 0.9 percent and the Shanghai Composite Index slid 0.7 percent.

The yen weakened 0.4 percent to 97.76 per dollar, set for the lowest close since Oct. 1. Japanese machinery orders rose 10.3 percent in August from a year earlier, beating the median estimate for 8.5 percent growth. New Zealand’s currency dropped 0.7 percent to 82.48 cents against the greenback.

Australia’s dollar fell 0.4 percent at 94.09 U.S. cents, after gaining 0.2 percent yesterday. The unemployment rate unexpectedly fell to 5.6 percent in September from 5.8 percent as the number employed rose by 9,100. The median estimate in a Bloomberg survey was for an increase of 15,000 workers.
Bank of England

Copper for three-month delivery rose to $7,130 a metric ton on the London Metal Exchange. Aluminum added 0.3 percent.

In Europe, economists expect the Bank of England to leave interest rates unchanged at 0.5 percent today, while reports may show French and Italian industrial production rose 0.6 percent in August, according to Bloomberg surveys. The nations are the biggest economies in the euro region after Germany.

One-month non-deliverable forwards on Brazil’s real were little changed today at 2.2239 per dollar. The country’s central bank yesterday extended the world’s biggest interest rate increase and raised the key rate for a fifth straight time as a weaker currency hampers efforts to slow inflation.
Treasury Bills

Declines in Treasury bills indicate investors remain concerned over a default as next week’s deadline looms.

Rates on Treasury bills maturing Oct. 17 were little changed in Asian trading after climbing 20 basis points, or 0.2 percentage point, yesterday and jumping 14 basis points Oct. 8. Yields on benchmark 10-year Treasuries also held gains, trading at 2.69 percent after climbing three basis points in New York.

Treasury bills are a good bet, Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., said on Bloomberg Television.

“We pick up pennies on the street, and this is a particular penny we think is risk free,” Gross said of buying Treasury bills. “When you analyze it from the standpoint of odds, it’s probably a 250,000-to-one-type of bet that there is a technical default or a default on a Treasury bill. We think it’s almost impossible.”