German bank sells U.K. unit, rules out capital increase Oil climbs as Saudi Arabia looks to future output deal Share on Facebook Share on Twitter European stocks rose as Deutsche Bank AG’s rebound from a record low spurred an advance in lenders. Oil climbed as Saudi Arabia signaled it may compromise on an output deal. Global equities extended this month’s rally after the largest German lender sold its U.K. unit and ruled out a capital increase. The S&P 500 Index erased gains as a slide in phone companies offset a surge in energy shares, while traders assessed remarks from Federal Reserve officials. Crude topped $45 a barrel in New York amid indications that a supply accord would be possible in November and after a government report showed that U.S. crude inventories dropped last week. The dollar halted a two-day decline. Financial companies paced gains in global stocks, rebounding from a selloff that was driven by concern over Deutsche Bank’s capital buffers. The German lender has lost most more than 50 percent of its value this year as it struggles with tougher capital standards, negative interest rates and soaring legal bills. After selling its Abbey Life Assurance Co. unit, the institution boosted its capital Tier 1 ratio by about 10 basis points. The financial condition of the largest U.S. banks has “strengthened considerably� since the crisis, Fed Chair Janet Yellen said in prepared remarks to the House Financial Services Committee in Washington. “As banking worries are slowly getting behind us, the risk-on sentiment will be back,� said Patrick Spencer, London-based vice chairman of equities at Robert W. Baird, which manages $151 billion. Meanwhile, investors are looking for signs that the economy is strengthening and awaiting the next earnings season, which will kick off in about two weeks. A report today showed orders for durable goods were little changed in August, while shipments of capital equipment declined for a fourth straight month, indicating lingering weakness in manufacturing. A revised reading on second-quarter growth, pending home sales as well as measures of personal income and spending are due later this week. Yellen is testifying today on bank supervision and regulation, while three other Fed officials were also scheduled to deliver remarks before markets close. Stocks MSCI’s gauge of global equities rose 0.1 percent at 10:40 a.m. in New York, extending its monthly advance to 0.5 percent. The S&P 500 fell less than 0.1 percent. The gauge has hovered between its average prices during the past 50 and 100 days for 12 of the past 13 sessions, the most since 1992, according to data compiled by Bloomberg. “We’re about to head back into earnings season, when we’ll see if stocks can get the pick-up the market’s been hoping for,� said Matt Maley, an equity strategist in New York at Miller Tabak & Co LLC. The Stoxx Europe 600 Index climbed 0.8 percent as Deutsche Bank jumped 2.8 percent. Rio Tinto Group and ArcelorMittal led miners higher. Germany’s DAX Index and Italy’s FTSE MIB Index snapped a three-day losing streak, while automakers and banks boosted France’s CAC 40 Index. Shares in emerging markets also advanced. SABMiller Plc helped lift South Africa’s benchmark after investors approved a takeover by Anheuser-Busch InBev NV. Saudi Arabia stocks posted the steepest two-day slump since January amid concern austerity measures will curb growth, while people familiar with the matter said the kingdom’s first international bond may be delayed. Commodities Oil rose 1 percent in New York after falling 2.7 percent Tuesday. An accord is possible when OPEC next gathers in November, Saudi Arabian Oil Minister Khalid Al-Falih said at a briefing in the Algerian capital. His Iranian counterpart, Bijan Namdar Zanganeh, said Iran wants time to reach output of about 4 million barrels a day but is “doing all that it can� to get an agreement with fellow OPEC members, according to Oil Ministry news service Shana. "The Saudi-Iranian position is not reconcilable at this time, however Iran is viewing the talks that they’re going to have today as consultative, with perhaps an outcome that would be there to set up the next round," said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. "In the end, if OPEC is going to come out with a big decision, it just seems incongruous that they would announce this decision at Algiers. It’s not the right venue." West Texas Intermediate for November delivery was at $45.11 a barrel on the New York Mercantile Exchange. Total volume traded Wednesday was about 6 percent above the 100-day average. Prices have averaged about $44.80 this quarter. Tin climbed to the highest since January 2015, nearing $20,000 a metric ton, as inventories of the metal tracked by the London Metal Exchange continued to fall, hitting the lowest almost eight years. Copper and aluminum also advanced. Gold fell. Currencies A gauge of the dollar halted a two-day decline as investors awaited speeches by Fed officials to assess the prospects for an interest-rate increase by year-end. “We see a high chance of a rate hike in December, and expect the dollar to trade slightly stronger by the end of the year,� said Thu Lan Nguyen, a foreign-exchange strategist at Commerzbank AG in Frankfurt. “But the dollar is currently moving sideways as the market is waiting for new impetus.� The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, rose 0.1 percent, after sliding 0.4 percent in the previous two days. The yen weakened 0.2 percent to 100.59 per dollar. The greenback was little changed at $1.1226 per euro. Fed Vice Chairman Stanley Fischer said Tuesday low interest rates have helped deliver U.S. labor-market gains that are feeding through to higher wages. While he didn’t discuss the timing of any increase in borrowing costs, he said the move in wage inflation from about 2 percent last year to about 2.5 percent this year provides evidence the connection between unemployment and inflation, which looked less convincing over the past decade, still exists. Bonds Benchmark 10-year note yields were little changed at 1.55 percent, according to Bloomberg Bond Trader data. Goldman Sachs Group Inc. says inflation pressures are starting to build -- and bonds are signaling traders agree. Investors anticipate consumer prices worldwide will rise 1.3 percent annually, the highest level in 14 months, based on Bank of America Corp. data. The figure, derived by comparing yields on nominal government securities to those on inflation-linked debt, compares with Federal Reserve’s 2 percent target. “All of the signals are suggesting that we are now pretty close to full employment, and we’re starting to exert some upward pressure on inflation,� Jan Hatzius, chief economist at Goldman Sachs in New York, said in a Bloomberg Television interview Tuesday. “I do think the Fed is going to respond to that. Gradually, but I think they will respond.� There’s a 65 percent chance the Fed will raise interest rates in December, said Hatzius, whose firm is one of the 23 primary dealers that trade directly with the U.S. central bank. Federal funds futures contracts indicate the probability is 50 percent. The Treasury Department is scheduled to sell $28 billion of seven-year notes and $13 billion of two-year floating-rate notes Wednesday.

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