* European shares up 0.2 pct, set for 5th monthly rise
* Euro holds within recent ranges ahead of U.S. jobs data
* Oil above $109 a barrel as U.S. east coast refineries
return
By Richard Hubbard
LONDON, Oct 31 (Reuters) – World shares and the euro edged
up on Wednesday as investors braced for a storm-hit Wall Street
to reopen after its two-day closure and looked ahead to economic
data later in the week.
On the last trading day of the month, the reopening of U.S.
stock and bond markets after a lockdown during super storm Sandy
is likely to produce choppy trading conditions, although stock
index futures point to a strong start.
“The market is waiting to see how the U.S. market opens
after Sandy. Equity futures are higher, so people are expecting
a positive opening,” said Arne Lohmann Rasmussen, head of
currency research at Danske Bank in Copenhagen.
The December S&P; 500 index futures contract traded on the
Chicago Mercantile Exchange’s Globex electronic trading platform
was up 0.6 percent.
Investors were also standing back from the markets ahead of
some major data releases, including October surveys of
manufacturing activity in China and the United States on
Thursday and the monthly U.S. jobs report on Friday.
Caution has also increased over the tight U.S. presidential
election race as Tuesday’s vote nears, with traders trying to
assess its implications for resolving the fiscal problems facing
Washington which could stall the current economic recovery.
“Until we get to the other side of the election, the other
side of payrolls and the other side of this mess in New York,
the market is going to think twice about taking risk of any
significant size,” said Ned Rumpeltin, head of G10 FX strategy
at Standard Chartered Bank.
The euro rose 0.4 percent against the dollar to
$1.3014, its strongest in nearly a week, though still within the
$1.28 to $1.32 range seen since mid-September.
The MSCI world equity index was up 0.3
percent at 330 points; it remains on track for its first monthly
loss since May but has gained over 10 percent so far this year.
EURO OUTLOOK CLOUDED
The outlook for the European single currency remains clouded
by uncertainty over when Spain may apply for a bailout – a move
which would allow the European Central Bank to buy its bonds –
and over whether Greece will agree to more austerity and
reforms. But the euro gained some support on Wednesday from some
improving economic data across the region.
Euro zone inflation eased as expected in October thanks to
slower growth in energy prices, while German retail sales rose
in September at their fastest pace since June 2011, reinforcing
a view that private consumption will remain a pillar of support
for the economy.
Consumer spending in France also inched up 0.1 percent in
September, rebounding from a 0.8 percent fall in August, though
most analysts had expected better.
But unemployment is still an unfolding disaster in the euro
zone, with 146,000 more people joining the ranks of the jobless
which have swelled to 18.49 million or 11.6 percent of the
workforce of the 17-nation currency bloc.
“The euro-zone unemployment rate looks set to rise further,
placing more pressure on struggling households,” said Ben May,
European economist at Capital Economics.
European stocks did manage to add to their solid gains for
the month thanks to some good earnings reports, though
uncertainty over the reaction on Wall Street to the economic
impact of Sandy was also keeping many investors sidelined.
The FTSE Eurofirst index of top European shares was
up 0.2 percent at 1,107 points, bringing its gains for the year
to date to over 10.5 percent after five straight monthly rises.
Germany’s DAX index gained 0.7 percent due in part
to strong profits by airline Lufthansa, but London’s
FTSE 100 fell following an 18-percent share price drop
for oil and gas firm BG Group after it said it did not
expect its production to grow at all next year.
COMMODITIES STEADY
In the oil market, the after-effects of Sandy on the U.S.
east coast were still being assessed, with reduced fuel demand
expected and roads and airports remaining shut, even as
refineries in the region slowly resumed operations.
“We may have a rapid return of supply, but the demand will
be slower to recover,” said Tony Nunan, a risk manager at
Mitsubishi Corp.
Brent crude for December delivery was up 60 cents at
$109.68, while U.S. crude for December rose 76 cents to
$86.43, still on track for the biggest monthly loss since May.
Trading of oil, natural gas and other commodity futures and
options run by the CME Group at the NYMEX world
headquarters in New York is set to resume on Wednesday. But the
U.S. Energy Department has delayed its weekly petroleum
inventory report by a day to Thursday.
Meanwhile gold had inched up 0.1 percent to $1,711.01
an ounce, but it, too, is on course for its biggest one-month
decline since May, with a monthly drop of more than 3 percent.
