European stocks rose, rebounding from the biggest three-day drop in almost two months, while the dollar and Treasuries fell before the Federal Reserve releases its latest policy statement and emergency talks to discuss Greece’s referendum on its bailout. The Stoxx Europe 600 Index climbed 0.8 percent as of 8:06 a.m. in London. Standard & Poor’s 500 Index futures added 0.7 percent, following a 2.8 percent slump in the U.S. stocks gauge yesterday. Treasury 10-year notes snapped a three-day rally, while the Dollar Index retreated 0.4 percent. Copper gained 2.9 percent, advancing for the first time in three days. European Union leaders holding emergency talks on the eve of the Group of 20 summit in Cannes, France, will likely tell Greek Prime Minister George Papandreou there is no alternative to budget cuts imposed in a bailout plan hammered out last week. The Fed is probably engineering a third round of large-scale asset purchases, even as a decision is unlikely to be announced today, economists surveyed by Bloomberg News said. “Despite the headlines, some people are using the opportunity to buy into the market,” Mohammed Apabhai, head of Asia trading strategy at Citigroup Inc., said in a Bloomberg Television interview from Hong Kong. Almost 10 shares rose for every one that fell on the Stoxx 600, which rebounded from a three-day, 5.8 percent loss. Inmarsat Plc (ISAT) gained 4.9 percent after the biggest provider of satellite services to the maritime industry said third-quarter earnings rose 18 percent. Lundin Petroleum AB (LUPE), the oil explorer with a stake in the giant Avaldsnes-Aldous Major North Sea find, rallied 4.5 percent after forecasting higher production in 2012. QE3 Prospects Futures signal the S&P 500 may halt a two-day 5.2 percent drop. Sixty-nine percent of economists surveyed by Bloomberg say Chairman Ben S. Bernanke will embark on a third round of quantitative easing, or QE3, with a plurality of 36 percent predicting the move in the first quarter of next year, according to the poll of 42 economists from Oct. 26-31. Treasury 10-year yields increased six basis points to 2.05 percent, following a three-day drop. The U.S. will announce today the size of auctions scheduled to take place next week. Yields on German five-year notes climbed six basis points to 1.01 percent before a sale of as much as 5 billion euros ($6.9 billion) of the securities. The euro earlier fell as much as 0.5 percent before rising 0.4 percent to $1.3758. German Chancellor Angela Merkel and French President Nicolas Sarkozy held emergency talks on Greece yesterday and in a joint statement called on Europe to implement the package of measures. Sarkozy told reporters the plan is the “only way” to fix Greece. Greece’s Referendum The Greek referendum will hinder the next installment of aid funds by the International Monetary Fund and the European Union, Dutch Finance Minister Jan Kees de Jager said. Japanese Finance Minister Jun Azumi said people are “perplexed” by Greece’s decision to hold a referendum on its fiscal bailout. The MSCI Asia Pacific Index lost 0.5 percent. Japan’s Nikkei 225 Stock Average dipped 2.2 percent, Australia’s S&P/ASX 200 Index lost 1.1 percent, while Hong Kong’s Hang Seng Index rallied 1.9 percent. OneSteel Ltd. (OST) tumbled 18 percent in Sydney after the steelmaker said earnings will probably be hurt by a decline in iron ore prices and an increase in the Australian dollar. Nomura Holdings Inc. sank 4.1 percent after Japan’s largest brokerage reported a first-half loss. Toyota Motor Corp. and Honda Motor Co. slipped at least 3.5 percent after the automakers posted U.S. sales declines for October. Credit Risk, Copper The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed 15 basis points to 212.5 basis points, Royal Bank of Scotland Group Plc prices show. The index is poised to close at the highest since Oct. 11, after gaining 18.5 basis points yesterday, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. Copper for three-month delivery added 2.9 percent to $7,950.25 a metric ton on the London Metal Exchange. Futures dropped 5.4 percent in the past two days. Nickel climbed 1.9 percent and aluminum gained 1.1 percent. Copper inventories monitored by the LME declined for a ninth session, extending the biggest monthly slide since June 2009. Stockpiles dropped 1.1 percent to 424,750 tons yesterday, exchange figures showed. That’s the lowest level since March 3, according to data compiled by Bloomberg. To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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