By Stephen Kirkland Aug. 5 (Bloomberg) -- U.S. index futures fell and European stocks pared gains after a report showed American jobless claims unexpectedly increased. The Swiss franc strengthened and wheat jumped to a 23-month high. The Standard & Poor’s 500 Index futures sank 0.5 percent at 8:45 a.m. in New York. The Stoxx Europe 600 Index advanced 0.1 percent, after earlier climbing as much as 0.6 percent. The Swiss franc appreciated against all of its 16 most-traded peers, and wheat futures rallied as much as 7.9 percent after Russia said it would ban grain exports. Initial jobless claims in the U.S. climbed by 19,000 in the week ended July 31, the most since April and exceeding the highest estimate of economists surveyed by Bloomberg News. The U.S. faces a 25 percent chance of deflation and a double-dip recession, according to Mohamed A. El-Erian, chief executive officer at Pacific Investment Management Co. “Today is an in-between day, after the better-than- expected U.S. figures yesterday, but ahead of the payroll report tomorrow,” Kit Juckes, head of foreign-exchange research at Societe Generale SA in London, wrote in a report. “Focus is on central bank policy meetings” and the ECB may “spice things up,” he wrote. Economists forecast claims would fall to 455,000, according to the median of 43 projections. Estimates ranged from 444,000 to 470,000. The government revised the prior week’s total to 460,000 from a previously reported 457,000. The Labor Department data comes a day before the July payrolls report, which may show the economy shed 65,000 jobs last month, according to the average of 81 economists surveyed by Bloomberg. Asia, Europe The MSCI World Index of stocks in 24 developed nations advanced 0.4 percent. The MSCI Asia Pacific Index rallied 0.7 percent, led by Japanese equities after Toyota Motor Corp. raised its profit forecast. Aviva Plc, the U.K.’s second-biggest insurer, climbed 7 percent after profit topped analysts’ estimates. Barclays Plc slipped 3.6 percent after reporting a drop in revenue at its investment-banking unit. Unilever Plc, the world’s second-biggest consumer-goods maker, fell 4.8 percent after sales missed forecasts. BP Plc rose and the cost of insuring the company’s debt against default fell for a fourth day as the oil producer prepared to pump cement into its crippled Gulf of Mexico well and sell assets to finance the cleanup. The shares advanced 0.5 percent and credit-default swaps dropped 35 basis points to 225, according to data provider CMA. The Swiss franc appreciated 0.5 percent against both the euro and 1 versus the dollar. The euro traded near a three-month high against the U.S. currency. Heat Wave The pound strengthened 0.2 percent versus the dollar as the Bank of England left its main rate at a record low of 0.5 percent and kept a 200 billion-pound ($318 billion) debt-buying program unchanged. The New Zealand dollar weakened against all 16 major currencies after the nation’s jobless rate rose more than economists forecast. Wheat futures rose to $7.7825 a bushel in Chicago, the highest price since Aug. 27, 2008. A heat wave in Russia, excess rain in Canada and dry weather in Kazakhstan, Ukraine and parts of Europe are draining stockpiles. Russia, the world’s third- biggest grower, said it would ban grain exports from Aug. 15 because of its worst drought in at least a half century. To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net

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