* European shares up 0.3 pct, U.S expected to open up
* Euro rises 0.11 pct, dollar index struggles
* Spain rescues request eyed
* German Bund futures dip
By Marc Jones
LONDON, Sept 21 (Reuters) - World shares and the euro clawed
their way back up on Friday and oil rebounded from a 1-1/2 month
low as investors brushed aside the latest news of Britain's and
Italy's economic and debt problems amid hopes Spain is gearing
up to accept EU and ECB aid.
Having ended three of the last four sessions in the red, the
FTSEurofirst 300 was clinging to 0.3 percent gains by
midday, providing fragile support to a 0.3 rise in the MSCI
The arrival of Apple's latest iPhone in global stores was
expected to help lift U.S. stock markets when trading resumes.
Like many indices, Wall street has been subdued this week as
investors cool off after blistering 15-20 percent rallies in top
equities markets since June.
Despite early momentum, Frankfurt's Dax was the
only top European equities index left firmly in positive
territory at 1200GMT as markets see-sawed as options contracts
"The options roll-offs are giving a lot of volatility ... at
the moment it's very, very difficult to say whether the moves
are fundamentally driven or order-driven," said Michael Hewson,
senior markets analyst at CMC Markets.
Markets brushed off a well-flagged report from the UK
showing its plans to bring down its deficit have fallen behind
target as the European debt crisis has hit global growth.
It followed Italy's warning late on Wednesday that its
recession will be far more severe than forecast, making it
harder to reduce the country's debt burden.
The euro, which has lost around 1.5 percent since
hitting a 4-1/2 month high a week ago, was up 0.1 percent at
$1.2975 by lunch having briefly climbed back above the
psychological $1.30 mark.
The dollar fell 0.1 percent against a basket of currencies,
with the its index at 79.335, bringing it closer to a
six-and-a-half month low of 78.601 hit last week in the wake of
aggressive monetary easing by the U.S. Federal Reserve.
With all eyes on whether Spain will call for aid, support
for the euro was seen at Thursday's low, which stood just above
its 233-day moving average at $1.2915.
"It is just a matter of time before Spain applies for
financing in the coming weeks and that will be euro positive,"
said Carl Hammer, chief currency strategist at SEB in Stockholm.
Underlining the fears about faltering global growth, the
World Trade Organisation cut its global trade forecast to 2.5
percent from 3.7 percent on Friday.
In bond markets, the appetite for risk remained fragile
following Italy's government warning the country's recession
would be worse than feared.
Spain and Italy's 10-year bond yields
were slightly higher although demand for German
government bonds also eased, with December Bund futures
15 ticks lower at 140.15.
Spain appears to be slowly moving towards requesting
financial assistance. The government is considering freezing
pensions and speeding up a planned rise i n the retirement age to
meet conditions for aid, sources with knowledge of the matter
The ECB's new plan, which requires struggling countries to
submit to fiscal rehabilitation programmes in order to qualify
for bond-buying support in the open market, has been one of the
key factors in the sharp drop in Italian and Spanish borrowing
costs and the 15-20 percent surge in major stock markets.
Finnish ECB policymaker Erkki Liikanen reiterated the ECB's
intention to stabilise the bloc's strained bond markets, saying
inflamed borrowing costs based on speculation the euro could
break apart were "unacceptable".
Wheat prices, which have only just started to ease after
surging more than 40 percent since June, were on the rise again
as Russia warned it could ban wheat exports if its domestic
prices continue to rise
"I think this is likely to produce a lot of upward pressure
on prices," said analyst Sudakshina Unnikrishnan of Barclays
Capital, adding today's comments followed recent vehement
denials that such action would be considered.
Oil prices, which have risen by almost a third since June
but have eased this week, edged back up to $111 a barrel on
Friday as Libya's precarious security situation and lower North
Sea production stoked supply fears.
"We saw oil prices spike up around 30-32 percent last year
when Libya was out of the market," said Natalie Rampono, a
commodity strategist at ANZ. "This is something to focus on,
especially if the security situation deteriorates."
Gold prices hovered at a 6-1/2 month high, crawling up 0.2
percent to $1,770.76 an ounce supported by the ongoing lift from
the recent aggressive moves from the Fed, ECB and the bank of