LIVE MARKETS-Brexit: "A new paradigm" for the pound

* European shares' rebound continues after Monday's plunge

* Strong bank earnings provide support, Santander rallies

* Caution remains over spreading China virus

* Apple suppliers in demand as iPhone back to growth

* Wall Street opens higher Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to share your thoughts on market moves: julien.ponthus.thomsonreuters.com@reuters.net

BREXIT: "A NEW PARADIGM" FOR THE POUND (1506 GMT)

With the UK finally leaving the EU on Friday night, traders will probably need to adjust to a brave new world little twist and turn on the negotiations with Brussels won't make so much of an impact on sterling.

Why? Simply the expectations are now fairly low on the future EU/UK trade deal, DB analysts believe, evoking a "new paradigm".

"Progress in negotiations can no longer be seen as an unambiguous positive as they have been over the last couple of years, and vice versa", they write in a UK economics note.

"The sensitivity of sterling to Brexit related news should decline unless this news indicates the UK government has changed its negotiating priorities and is contemplating a softer future relationship or extension of the transition period," they add.

On the bright side, FTSE and FTSE markets reports are less likely to be driven so much by big FX moves which steal the spotlight from company news.

(Julien Ponthus)

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(E)MISSION IMPOSSIBLE? (1428 GMT)

Global leaders and corporations are trying to cut down their carbon footprint, activists are pushing for a swift action to save the planet from burning or drowning and meanwhile banks are hunting for investment opportunities.

BofA says: "A big transition to tackle the climate crisis will adversely affect the fossil fuel ecosystem but also create multi-trillion-dollar opportunities."

From one trillion dollars to a two-trillion-dollar market in a span of five years -- that's the speed at which climate solutions market is expected to grow and watch out for renewable energy, electric vehicles, batteries and biofuel companies, BofA says.

In the investment world, climate change has been cited as the no. 1 ESG risk, the bank says adding that its clients are increasingly asked about climate risks by asset owners.

Here are some eye-watering facts put together by BofA:

* Around 30% of the world's population is exposed to deadly heat levels for at least 20 days a year

* Climate change will cost 3.2% of GDP by 2030, up from 1.6% today ($1.2 trillion)

* The global apparel textile industry has a higher carbon footprint than airlines and shipping combined

* Air pollution kills 7 million people each year, costing US$5 trillion/year

* Australian bushfires have burnt an area greater than the size of Portugal since September (97,000 km2) and emitted two-thirds of the nation's annual carbon emissions compared with a normal year

BofA says tech alone cannot be a solution to the massive climate change risk, but it's also "behaviour change in food (less or no meat), travel (public transport and trains vs. flights) and consumption (re-use, repair, live with less, local) is also vital".

(Thyagaraju Adinarayan)

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THE FED CORONAVIRUS PUT (1351 GMT)

If the Fed's expansive policy is really the main agent behind the longest bull market in history, then why would the U.S. central bank let a virus spoil the end of the cycle (assuming there's is actually an end to 'lower forever').

So there's little surprise then that any hint of a possible Fed coronavirus 'Put' is exactly what investors from all over the planet will be looking for at the FOMC press conference.

"We will look for any mention by the Fed (or Powell in the subsequent press conference) of the current nCoV virus scare", BNY Mellon analysts wrote on Tuesday.

"Should conditions worsen suddenly – and negative developments in the world's efforts to contain the virus count near the top of the list as risks to the outlook – the Fed should make its willingness to change policy clear", it adds. "Anything short of that could be viewed as a hawkish surprise and we would see the related impact on the dollar, risk markets and the yield curve".

Anyhow, while the consensus is that the Fed won't budge for the time being, expectations, as we saw last year with rates going down rather than up, are just that.

There is no shortage of wild views out there on where we are sailing to.

"We expect the Fed will be forced to cut rates all the way back to zero before the end of the year", was the take of Rabobank's Global Daily.

(Julien Ponthus)

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APPLE STRUDEL!

Yes, we have yet another Apple market cap comparison and this time it's a significant one: Apple has taken out the entire Germany's DAX 30.

The FT reported it first and it describes it as a striking example of how Germany risks being left behind by the 21st century tech boom. http://tiny.cc/2bsbjz

(Danilo Masoni)

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CORONAVIRUS: "AT THIS STAGE WE DO NOT ADJUST FORECASTS" (1135 GMT)

Interesting to note that the travel and leisure index has been rising in sync with the STOXX 600 this morning, as the market continues its recovery (or gets complacent -- you choose) after Monday's big coronavirus scare.

Those getting back into the sector just as BA suspends all its flights to China might take comfort in this HSBC sectoral research note in which the bank's analysts take the view that while the virus outbreak potentially threatens the sector, some of the risk is often already priced in.

"At this stage we do not adjust forecasts for the Coronavirus impact", they write.

They notably take comfort in how markets reacted during the SARS precedent.

"As we highlight earlier in this report, the impact from the Novel Coronavirus may impact travel demand, but historically air volumes were resilient in the UK and Europe during the SARS epidemic".

Here's their chart:

(Julien Ponthus)

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EUROPE'S CORPORATE RECOVERY IS TURNING ELUSIVE (1054 GMT)

With Santander's Q4 shining all over the banking sector, today's batch of earnings doesn't look particularly grim, even if KPN's have clearly dampened the mood for telcos .

What's really more concerning is the constant pace at which earnings expectations are sliding down to a point where the awaited end of Europe's corporate recession is becoming somewhat elusive.

This was supposed to be the quarter during which profits would finally rise again for the STOXX 600 after three sets of decline.

But looking at the chart below, things don't look that good, particularly at a moment when strategists are struggling to justify current valuations.

(Julien Ponthus)

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WHY A BIG CORRECTION LOOKS UNLIKELY (1023 GMT)

Two days of gains have almost erased Monday's nervy coronavirus drop and even though many remain sceptical about the market's apparent resilience, the fact that investor positioning is still cautious would suggest that a big correction is unlikely.

"We acknowledge that the macro implications of the coronavirus outbreak are unknown at this stage and that the situation could get worse before it gets better", strategists at the UK bank led by Emmanuel Cau say.

"That said, while equities could be vulnerable to further profit-taking in the near term, we believe that the risks of a more material correction such as the ones of Q1 or Q4 2018 are low... even accounting for the recent inflows, LO equity positioning doesn’t look particularly stretched," they add.

Check out this Barclays chart below:

(Danilo Masoni)

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WAITING TO BUY THE BIGGER DIP (0925 GMT)

Crises like coronavirus often provide good entry points and crucial to this is timing.

For now the prevailing idea is that things will get worse before they get better and it looks that stock pickers are waiting for a bigger sell-off before chasing any opportunity.

"History tells us that these crises resolve quickly (SARS, bird flu, swine, etc.) But we have not yet reached the peak of negativity: it usually happens when the WHO issues a global alert and for now we are only at the local level," says Angelo Meda, head of equities at Banor SIM in Milan.

"We are monitoring the daily evolution of the cases and we think there could be more bad news. In the sectors, luxury is at a strong premium on the market compared to the past, which reduces is upside; better (to look at) airlines, mining and oil!," he adds.

For more on the topic:

LIVE MARKETS-History lessons: crises can be buying opportunities

LIVE MARKETS-Buying the dip in mining?

LIVE MARKETS-Luxury upgrades in the time of Coronavirus

(Danilo Masoni)

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HANGING ON IN THERE WITH A LITTLE HELP OF SANTANDER (0856 GMT)

Seems the market finally chose its side and tilted towards 'risk-on' as Q4 headlines piled in with Santander giving a much needed boost to Spain's IBEX and more critically the banking sector as a whole.

The Spanish bank is up over 4%, lifting the sector to a 1% rise, which is in turn helping the STOXX 600 cling on yesterday's rebound with a 0.4% rise.

Signs that the mood is upbeat, cyclicals are back in favours with miners and autos for instance in the leading pack.

Airlines are recovering despite BA suspending its flight to China. Clearly Wizz Air's results are helping and so is a positive Berenberg note on Lufthansa.

KPN is close to single-handedly bring the telecom sector in negative territory with an impressive 6.8% fall after disappointing Q4 results.

The Tech sector is also brought down by Avast which is down close to 10% on negative reports about an anti virus software. Meanwhile, Temenos is enjoying a 2.5% boost after the announcement of a partnership with Google.

Another big loser is SES, sliding 6% on a senate bill that limits payout to companies that vacate C-band airwaves. The SMARTER Act proposes satellite operators receive an incentive payment of just $1 billion, Exane says, adding that it's well below market expectations (Exane est. $9.4 billion)

Here's your opening snapshot:

(Julien Ponthus)

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ON THE RADAR: AIRLINES, LVMH, TELCOS AND THE APPLE READ-ACROSS

Among news which could spook the market and travel/leisure stocks is British Airways suspending all direct flights to and from mainland China.

On the upside, Wizz Air is expected to rise 2-3% after it upgraded its annual profit forecast.

Also the fact that sales growth at LVMH were impacted by protests in Hong Kong could send jitters through the luxury sector even though Italy’s Salvatore Ferragamo met its guidance with a slight increase in 2019 revenues. The French luxury group is expected to lose 2-3% at the open.

Apple’s results is likely to cheer up European suppliers such as Dialog Semiconductor, STMicro, ASML or AMS but investors could view it as a glass half empty due to possible supply disruptions from fast-spreading coronavirus.

In other tech news, Software is likely to be a big faller during the session after a poor set of results.

Europe’s Q4 season has begun in earnest and telecoms look in a good spot with Finland’s Elisa, The Netherlands’ Dutch Royal KPN, Norway's Telenor and Sweden’s Telia all reporting upbeat earnings. There’s also some M&A with Vodafone agreeing to sell its 55% stake in its Egyptian unit for $2.4 billion

Good news for banks also with Sweden’s SEB and Spain’s Santander unveiling with better than expected profits.

UK house prices rising at their fastest pace since Nov 2018 will no doubt continue to fuel speculation on the BoE's possible rate cut but could help house builders.

Novartis is also thought to be a winner after fourth-quarter core net income rose 13%.

From pre-mkt indications, Airbus’ billions of provision for corruption isn’t seen moving the stock and same seems to go for Renault and its new CEO.

(Julien Ponthus)

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MORNING CALL: CLINGING TO THE REBOUND (0645 GMT)

European stocks are expected to cling to the wagon of yesterday's market rebound with a little help from positive Q4 results from Europe Inc but also from Apple, which helped lift Wall Street higher and later reported better than expected sales and profits.

Things were left rosy in Asia where shares fell as a spike in new cases of the new Coronavirus added to worries about the economic impact of the outbreak.

At the time of writing, futures point to a limited rise in shares of 0.1% to 0.2% and financial spreadbetters expect London's FTSE to open 23 points higher, Frankfurt's DAX 27 points up and Paris' CAC to gain 5 points.

So far, the figures reported by Novartis, Telenor, Santander, KPN, SEB and Telia in this busy earnings season session seem encouraging.

That said, some investors might decide to stay cautious before the Fed meets later today.

(Julien Ponthus)

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(Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)