Stocks (SXXP) rebounded from their worst week since September, U.S. futures rose and Treasuries fell as German and French officials prepared to meet before a summit to map out a new strategy to contain the debt crisis. Commodities gained on speculation China will ease policy to spur growth. The Stoxx Europe 600 Index added 0.3 percent at 10:55 a.m. in London, after advancing as much as 0.7 percent. Standard & Poor’s 500 Index futures climbed 0.6 percent. The yield on the 10-year Treasury note rose three basis points to 1.76 percent. The yen weakened against all 16 of its major peers. The S&P GSCI Index of 24 raw materials gained 0.3 percent, with oil rising 0.4 percent in New York and copper increasing 1.2 percent. German and French finance chiefs were scheduled to meet in Berlin before a European Union summit on May 23. Concern Greece will exit the euro erased about $4 trillion from global stock markets this month. China should adopt a “proactive fiscal policy and a prudent monetary policy� to bolster the economy, Premier Wen Jiabao said over the weekend. “In the case of a Greek exit from the euro zone, we think there would be a rapid, sentiment-driven sell-off on the fear of contagion,� said Michael Kurtz, head of global equity strategy at Nomura Holdings Inc., Japan’s largest brokerage, in Hong Kong. “This would likely bring about a large policy response to circle the wagons’ around the other periphery countries. With such a negative scenario apparently already priced, the bias is increasingly for the actual outcome over the next four to six weeks to surprise positively.� Popolare Upgrades More than two shares gained for every one that fell in the Stoxx 600. Fiat SpA and Renault SA led automakers higher, surging at least 4.5 percent. Banco Popolare SC (BP) jumped 10 percent as analysts from Bank of America Corp. to Exane BNP Paribas upgraded the shares after Italy’s fourth-biggest bank said regulatory approval to use internal risk models boosted its Tier 1 capital. The gain in S&P 500 futures indicated the U.S. gauge will rebound from the lowest level since Jan. 17. Facebook Inc. added 0.5 percent to the equivalent of $38.42 in Frankfurt after the stock climbed 0.6 percent to $38.23 in New York on May 18, its first day of trading. Nasdaq OMX Group Inc. yesterday blamed “poor design� in the software it uses for driving auctions in initial public offerings after Facebook shares were plagued by delays and mishandled orders. Credit-default swaps insuring European sovereign debt rose for a seventh day, with the Markit iTraxx SovX Western Europe Index of contracts on 15 governments climbing 2.5 basis points to 313.5, the highest since March. BOJ Meeting The yen fell 0.4 percent against the dollar, and depreciated 0.3 percent versus the euro. The yield on the 10- year Japanese government bond rose one basis point to 0.84 percent. Volatility on Japanese debt was the highest among developed markets, according to measures of 10-year bonds, two- and 10-year yield spreads and credit default swaps. The change in the nation’s 10-year yield was 2.9 times the 90-day average. The Bank of Japan, which starts a two-day meeting tomorrow, expanded its asset-purchase program in February and April. Last week, two bond-buying operations failed to attract the central bank’s target for sell offers. The MSCI Emerging Markets Index (MXEF) advanced 0.1 percent, increasing for the first time in seven days. The Shanghai Composite Index added 0.2 percent and South Korea’s Kospi index jumped 0.9 percent. Russia’s Micex Index rose 0.9 percent, and Poland WIG20 Index climbed 1.2 percent. The Serbian dinar depreciated as much as 0.7 percent to a record low against the euro after Tomislav Nikolic, who advocates closer economic ties with Russia, took the lead in yesterday’s presidential vote. To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; David Yong in Singapore at dyong@bloomberg.net; To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net

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