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LIVE MARKETS-BoE chief economist joins hawks, FTSE tumbles

* European shares drop after positive open

* Daimler (IOB: 0NXX.IL - news) warns on profit, blaming trade

* Auto stocks plummet to hit 9-month low

* Italian stocks fall after eurosceptic appointments

* BoE (Shenzhen: 000725.SZ - news) chief economist calls for rate rise

June 21 - Welcome to the home for real-time coverage of European equity markets brought to

you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger to

share your thoughts on market moves: helen.reid.thomsonreuters.com@reuters.net

BOE CHIEF ECONOMIST JOINS HAWKS (1121 GMT)

The Bank of England just delivered a hawkish surprise, in the form of its Chief Economist

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Andy Haldane joining long-term dissenters Michael Saunders and Ian McCafferty in calling for

rates to rise, delivering a 6-3 decision to keep rates on hold (against consensus expectations

for a 7-2 vote).

Sterling jumped on the hawkish outcome as traders priced in a higher likelihood of an August

rate rise, denting the FTSE 100 which is now down 0.5 percent at a fresh day low.

Ben Brettell, senior economist at Hargreaves Lansdown (Frankfurt: DMB.F - news) , reckons there still won't be a rate

rise then however. "Policymakers will at the very least want confirmation that the weak

first-quarter growth figure was just a blip before raising borrowing costs," he says.

(Helen Reid)

*****

ITALIAN ASSETS? "WORTH TAKING PROFIT" (1006 GMT)

If anyone thought that any bounce in Italian assets could last long they probably should

think again.

Even (Taiwan OTC: 6436.TWO - news) though new economy minister Giuseppe Tria reassured markets earlier this month saying

Italy had no intention of leaving the euro, reasons to take profit may abound as

the country's anti-establishment majority takes further steps in putting in practice its agenda.

One of those reasons came today when two leading eurosceptics from the far-right League,

Claudio Borghi and Alberto Bagnai, were picked to head respectively the Budget Committee in the

lower house of parliament and the Finance Committee in the upper house Senate.

"If Tria's interview reassured markets it would make sense that now (this news) could create

worries," said JCI Capital portfolio manager Alessandro Balsotti. "There is little value in

keeping Italian paper after the rally seen in the last 10 days".

News of the eurosceptic appointments sent Italian government bond yields spiking higher,

while Italy's top share index fell more than 1 percent.

Meanwhile, European bourses have also turned negative with the STOXX 600 down 0.3 percent.

(Danilo Masoni)

*****

TARIFFS ARE REAL: ALL BUT AUTOS RISE (0728 GMT)

Auto stocks are the big exception to today's continued bounce with their sectoral index

falling as much as 2.2 percent in early trading to their lowest since September 2017.

Daimler's profit warning is a tangible sign that Washington's protectionist

policies and retaliation measures are having a concrete impact on the corporate world.

Besides autos, today's bounce is broad-based and even the export-oriented DAX

index, which tracks Daimler and other big German car makers, is managing to limit its losses to

a fall of less than 0.1 percent.

While the pan-European STOXX 600 was up 0.3 percent, the FTSE 100 also

edged higher ahead of the Bank of England policy meeting that is widely expected to keep

interest rate unchanged but could give some clues on the pace of future moves.

Here's your snapshot:

(Danilo Masoni)

*****

WHAT'S ON THE RADAR FOR THE OPEN: DAIMLER TAKES BIG TARIFF HIT (0639 GMT)

European stocks are set to extend Wednesday’s modest relief rally as no new trade salvos

were exchanged, and after Asian markets and Wall Street made gains overnight with the tech-heavy

Nasdaq (Frankfurt: 813516 - news) sealing a new record high close.

Futures for the main European benchmarks are trading flat to up 0.5 percent, but it may be a

false dawn as trade tensions remain high ahead of the tariff implementation date of July 6, with

analysts at Goldman saying it seems likely trade concerns could rise further over the next few

months.

Autos stocks are set to fall further after Daimler issued a profit warning late on Wednesday

in the most high-profile impact of U.S. China tariffs on a European firm’s outlook yet.

The German carmaker said new import levies on cars exported from the U.S. to China would

hurt sales of its high-margin Mercedes Benz sports vehicles – an ironic turn of events for the

company after President Trump reportedly said he would pursue German car makers until there are

no more Mercedes (Xetra: 710000 - news) -Benz rolling down Fifth Avenue.

The autos sector – which hit a new 7-month low on Wednesday - is seen falling 1 percent,

with Daimler seen losing 3 to 4 percent, BMW (EUREX: BMWE.EX - news) 3 percent and Volkswagen (IOB: 0P6N.IL - news) 1 to 2 percent in

pre-market indications. Germany’s DAX futures are lagging the rest with autos likely to dent the

index.

Auto suppliers’ shares are also indicated down 2-3 percent on the negative readacross.

Oil and gas stocks are another key sector to watch ahead of the OPEC producer cartel’s

meeting on Friday. Crude prices are falling as Iran signaled it may support a small rise in OPEC

crude output, paving the way for a supply increase to be agreed.

M&A news includes Altice (Other OTC: ATSVF - news) selling stakes in French and Portuguese telecom towers to cut debt,

and Engie (LSE: 0LD0.L - news) selling its majority stake in Glow Energy to Thailand’s PTT (Stuttgart: 1306682.SG - news) for $2.9 billion.

Dixons Carphone (Frankfurt: CWB.F - news) confirmed its profit slump but its shares are seen rising modestly with

analysts and traders saying the announcement would drive a small relief bounce on no new bad

surprises after a profit warning cratered the shares at the end of May.

(Helen Reid)

*****

DAX FUTURES LAG EUROPE ON AUTOS, TRADE WORRIES (0612 GMT)

Germany's DAX futures are lagging European peers in early trade, reflecting the likely drop

in autos stocks driven by Daimler's profit warning.

"Bears will point out this is the first physical evidence of Trump trade war," says one

trader.

(Helen Reid)

*****

EARLY MORNING HEADLINE ROUND-UP (0536 GMT)

Autos will be in focus today again after Daimler late on Wednesday issued a profit warning,

saying new import tariffs on cars exported from the U.S. to China would hurt sales of

high-margin Mercedes-Benz sports cars - one of the first companies to directly factor in the

impact of tariffs.

Separately Chinese-owned Volvo Cars warned higher tariffs could undermine its plans to hire

up to 4,000 workers at a new car assembly plant in South Carolina.

Europe's autos sector hit a new 7-month low yesterday and is likely to be under further

pressure today.

In M&A news, Altice is selling stakes in French and Portuguese telecom towers, a move which

could be welcomed by investors keen to see its debt pile shrink, while Thailand's PTT is set to

buy power firm Glow Energy from Engie for $2.98 billion.

Daimler sees lower 2018 profit, blames trade war, emissions clamp-down

Volvo Cars CEO says auto tariffs threaten jobs at new U.S. plant

Altice selling stakes in French, Portuguese telecom towers to cut debt

Thai PTT to pay $4 billion for Glow Energy as Engie exits coal

Telecom Italia (Amsterdam: TI6.AS - news) keen to discuss fiber-to-the-home tie-up with Open Fiber

Deutsche Bank (IOB: 0H7D.IL - news) to pay $205 mln to settle NY currency rigging charges

Saudi bourse will be ready for capital inflows after MSCI EM inclusion

(Helen Reid)

*****

MORNING CALL: FADE IN TRADE WAR TALK LIKELY TO SUPPORT EUROPEAN STOCKS (0517 GMT)

European shares are seen rising quite strongly at the open after modest gains in Asia thanks

to a lull in trade war talk, while oil markets are nervy ahead of tomorrow's meeting of the OPEC

production cartel.

Asian shares edged higher on a respite in protectionist rhetoric from the U.S. and China, as

well as speculation the Chinese central bank would deliver more stimulus to the economy.

Wall Street had also made gains in the previous session with the unstoppable Nasdaq posting

a record high close.

Oil prices will likely drive stocks today too ahead of Friday's meeting between OPEC and

other big producers including Russia. Crude is declining slightly as tensions grow in the market

with Iran signaling support for a small rise in crude output.

Spreadbetters expect the FTSE to open 49 points higher at 7,676 points, the DAX to open 66

points higher at 12,761 and the CAC 40 to open 27 points higher at 5,400.

(Helen Reid)

*****

(Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)