LIVE MARKETS-BOE keeps rates on hold, FTSE kicks into positive territory

* European shares retreat

* BoE (Shenzhen: 000725.SZ - news) keeps rates on hold

* FTSE in positive territory as sterling hits session low

* RBS (LSE: RBS.L - news) reaches $4.9 bln US bond probe settlement

* Randgold, BT fall after updates

* Italian stocks fall on prospect of eurosceptic government

May 10 (Reuters) - Welcome to the home for real-time coverage of European equity markets

brought to you by Reuters stocks reporters and anchored today by Danilo Masoni. Reach him on

Messenger to share your thoughts on market moves: danilo.masoni.thomsonreuters.com@reuters.net

BOE KEEPS RATES ON HOLD, FTSE KICKS INTO POSITIVE TERRITORY (1115 GMT)

The main action is usually seen in sterling, which gives a knock-on effect to the FTSE 100,

so it was no surprise to see the blue chip index cut losses to trade around 0.2 percent higher

after the pound fell to the day's lows following the BoE's decision to keep rates on hold.

The central bank said that its nine rate-setters voted 7-2 to keep rates at 0.5 percent,

and said that it was looking for a pick-up in growth over the coming months - get the full story

here:

"Today’s no change decision wasn’t a surprise, and barely caused a ripple in the markets.

Sterling lost around half a cent against the dollar, but the real damage had been done in the

weeks leading up to today, with the pound almost eight cents weaker than four weeks ago," Ben

Brettell, senior economist at Hargreaves Lansdown (Frankfurt: DMB.F - news) , said.

Here's a chart showing the performance of the FTSE 100 and FTSE 350 banking index along with

the BoE's base rate over the past five years:

(Kit Rees)

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FTSE SLIPS AHEAD OF BOE (1022 GMT)

With (Other OTC: WWTH - news) the Bank of England rate decision coming up in less than an hour (due 1100 GMT) and

European stocks now trading in negative territory, we thought we'd take a look at some views

from the market about what to expect (the consensus is that rates will be left unchanged).

"A May hike was once viewed as very likely, but softer data and cautious Bank of England

comments have seen expectations pushed back, with a hike no longer fully priced in this year,"

-BNP Paribas FX strategists, who see the next hike in August.

“Generally I find the Bank of England’s situation difficult in regards to interest rate

policy. The tightening of monetary policy had been broadly alluded to in previously meetings,

possibly too much, yet the confused outlook for Brexit, politics in general in London, and a

broad trend of relative positive economic performance from all other G10 countries makes this by

far a simple & linear process,” - Jordan Hiscott, chief trader at ayondo markets, adding that a

rate hike in August looks more likely.

"What would be seen as a major threat to the Sterling resuming its horrific downward spiral

is if the BoE issues a downbeat policy statement, suggesting a downgrade in UK economic growth,

and a potential change in inflation forecasts limits the need to raise UK interest rates. This

would likely to spell more pain for the Pound," - Lukman Otunuga, research analyst at FXTM.

So all eyes on sterling and UK stocks now.

(Kit Rees)

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ARE WE PAST PEAK EURO HEADWINDS? (0935 GMT)

The impact of the euro has been a cause for concern for investors this earnings season in

Europe, and today UBS (LSE: 0QNR.L - news) equity strategists have said that Q1 earnings FX headwinds are closest to

their highest in a decade.

UBS says that this is one of the reasons behind why the number of net beats - 2 percent -

has been relatively weak, even when their strategists market cap weight the results (in which

case net beats rise close to being in line with long run averages).

But the good news is that UBS' strategists believe that we may now be past both the soft

patch in the domestic economy and peak euro headwinds in year on year terms, and still forecast

10 percent EPS growth in 2018.

(Kit Rees)

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MORNING SNAPSHOT: EUROPEAN STOCKS TREAD WATER (0825 GMT)

Even (Taiwan OTC: 6436.TWO - news) though European indexes are broadly flat after the first hour of trading, the focus is

very much on earnings, with shares in Randgold Resources the biggest fallers, down more

than 8 percent, after the precious metals miner reported lower Q1 gold output and profit, while

BT Group (Other OTC: BTGOF - news) is also lagging after giving some disappointing guidance and announcing some

hefty job cuts.

On the positive front, Next (Frankfurt: 779551 - news) 's shares are bouncing after the retailer raised its

profit forecast, while ITV (Frankfurt: A0BLQP - news) is also rising after its update. RBS is up 3.6

percent after its DoJ settlement was smaller than expected.

Energy stocks are taking a breather following yesterday's rally, while oil prices head

higher.

But until we get the BOE policy decision, it's likely that trading in Europe is going to be

cautious.

Here's your snapshot:

(Kit Rees)

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WHAT YOU NEED TO KNOW BEFORE EUROPE OPENS (0655 GMT)

European shares are expected to open flat to higher with FTSE futures leading the way, up

0.6 percent, ahead of a BoE meeting set to keep rates on hold following the recent collapse of

expectations for a rate hike. Futures on euro zone indexes were trading up 0.1 percent.

Royal Bank of Scotland is in the spotlight after it agreed to pay $4.9 billion to resolve a

U.S. Department of Justice probe into its structuring and sale of mortgage-backed securities

ahead of the 2008 financial crisis. Although the deal will pave the way for the UK sell more

shares in the bank its shares are called up 10 percent by one trader.

Still in banks, UniCredit (EUREX: DE000A163206.EX - news) is seen opening 2 percent higher after Italy's biggest lender

posted its best first-quarter result since 2007, topping forecasts with a 1.1 billion euro net

profit thanks to lower-than-expected loan losses.

BT shares are seen down 1-2 percent after it said it is cutting 13,000 jobs and leaving its

London headquarters in the latest attempt by Britain's biggest telecoms group to rebuild after

an accounting scandal and downturn in trading.

(Danilo Masoni)

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FTSE FUTURES OUTPERFORM AHEAD OF BOE (0614 GMT)

European stock index futures have opened in positive territory, confirming earlier

indications from spreadbetters, with FTSE futures leading the way, up 0.6 percent, ahead of

today's Bank of England policy meeting.

BoE interest rates looks set to stay on hold after unexpectedly weak economic data and

cautious remarks from Governor Mark Carney dashed the chances of what until a few weeks ago

looked like a near-certain increase.

"It is also quite likely that the Bank may well have to guide its growth expectations

lower... Inflation expectations could also be revised lower, which in term could see the pound

come under further pressure," says Michael Hewson, Chief Market Analyst at CMC Markets (LSE: CMCX.L - news) .

Here's your futures snapshot:

(Danilo Masoni)

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The Bank of England to announce May rate decision at 1100 GMT

HEADLINES ROUNDUP: EYES ON RBS SETTLEMENT, UNICREDIT RESULTS, AXA (Paris: FR0000120628 - news) 'S US IPO (0544 GMT)

Investors will likely be watching shares in RBS after a it reached a multi-billion deal to

settle a U.S. bond probe, while UniCredit could also be in focus after a solid-looking quarterly

update. The IPO of AXA's US arm missed its target, raising $2.75 bln.

Here are the links to these stories and more headlines that could move markets today:

RBS reaches $4.9 billion deal to settle U.S. mortgage bond probe

UniCredit beats forecasts with best Q1 result since 2007

AXA's U.S. arm raises $2.75 bln in IPO, misses target

Rolls-Royce operations chief to leave in streamlining

Altice USA reports quarterly loss due to high programming costs

Brazil's TIM: shares plummet as traders fret over royalty payments

Novartis (IOB: 0QLR.IL - news) calls $1.2 mln deal with Trump lawyer's firm a 'mistake'

EDF Q1 sales up 3.7 pct as nuclear reactors back on line

Enel (LSE: 0NRE.L - news) says Q1 net ordinary profit rises 10 pct

Banco BPM's debt recovery business attracting interest-CEO

Banco BPM Q1 net profit boosted by insurance deal

Randgold ends gold venture with Cradle Arc in Mali

YNAP on track for de-listing after Richemont offer breaches threshold

Italy Tod's expects sales to turn positive in second half of year

(Danilo Masoni)

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MORNING CALL: EUROPEAN SHARES SEEN HIGHER (0525 GMT)

European shares are set for a higher start today with financial spreadbetters expecting

Britain's FTSE to add 0.2 percent, while Germany's DAX is seen rising 0.4

percent and France's CAC gaining 0.3 percent.

Over in Asia, stocks rose with energy shares leading the way as crude oil prices bolted

higher after U.S. President Donald Trump's decision to pull out of a nuclear deal with Iran.

(Danilo Masoni)

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