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LIVE MARKETS-Deutsche Bank: the poster child for Germany's banking woes

* STOXX down 0.9%, DAX down 1.1%

* Just Eat, Delivery Hero, Takeaway slide as Amazon takes stake in Deliveroo

* easyJet takes off after results

* Thomas Cook shares, bonds tank as Citi sees stock falling to zero

May 17 - 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

DEUTSCHE BANK: THE POSTER CHILD FOR GERMANY'S BANKING WOES (1223 GMT)

You know it's bad when the market values one of Europe's largest banks on par with Greek and

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Turkish rivals.

Deutsche Bank, Greece's Alpha Bank and Turkey's Halkbank are trading at a smidgen

above 0.2 times their net account value, or book value (see chart).

For Germany's largest bank, that's the lowest since Dec. 28, after the stock hit a record

low during the global equities rout late last year amid worries about a world recession.

Greece is the poster child of the euro debt crisis and Turkey, the poster child of the

emerging market currency crisis.

In contrast, Germany is often considered Europe's economic engine fuelled by its car and

tech sectors as well as its heavy industry.

But its banking sector is overcrowded, fragmented and struggling with ultra low interest

rates and tougher regulation.

The scolding from the IMF this morning, which called on Germany's banks to speed up their

restructuring, highlights the problems facing the sector and frustration at the slow pace of

much-needed reform.

(Josephine Mason and Marc Jones)

*****

COULD EUROPE GAIN FROM THE U.S.-CHINA TRADE WAR? (1026 GMT)

It's a counterintuitive idea, for the world's largest trading bloc and the biggest regional

exporter to China to gain from a trade war between the U.S. and China - but it's one that's been

whispered this week and could be one of the drivers behind European stocks' relative

outperformance.

"To be clear, we are not advocating tariffs as the way forward," writes Jefferies' chief

European economist David Owen.

"It is just that they create winners amongst the losers, with both the ECB and the UN

recently suggesting that the EU, the biggest trading bloc globally, could benefit from trade

diversion."

He points to figures showing EU-28 exports of goods to China growing by 2.3% in the first

quarter vs Q4 and by 11.1% year-on-year.

Indeed, as you can see below, exports from the EU to China have risen over the past year

while those from the U.S. to China have tumbled.

Of course, that's not to say the EU will definitely benefit. Car tariffs still loom as a

possibility, even if kicked further down the road.

"Much depends on how much diversion there is, away from the U.S. and China to the EU & China

and the EU & the U.S.," writes Owen. "Trade is not a zero sum game and operates through

complicated global supply chains, which given their complexity we actually know little about."

(Helen Reid)

*****

OPENING SNAPSHOT: AMAZON DELIVEROO DEAL DEVOURS TAKEAWAY STOCKS (0722 GMT)

European stocks are sliding in early deals, down 0.3 to 0.8%, as investors grow more

hesitant after yesterday's rally.

It's been a choppy market this whole week with investors hanging on every twist and turn in

the trade war. Autos stocks, which got a big boost on Wednesday from news U.S. car tariffs may

be delayed, are the worst-performing, down 1.5%.

Amazon's backing of Deliveroo in the company's latest funding round is sending food delivery

stocks Takeaway, Delivery Hero, and Just Eat spiralling down.

The competitive pressure combined with a sense they missed out on backing from the U.S.

tech giant are sending Just Eat down 8%, Delivery Hero down 3.1% and Takeaway sliding 3.8%.

EasyJet, meanwhile, is top of the STOXX, up 5% after its guidance - in line with market

consensus - triggered relief among investors.

And Vallourec is shining, up 10.3%, after it reported a smaller Q1 loss.

As you can see below, the STOXX is still set for its strongest week in more than a month.

That's significant when compared with the second week of falls for world stocks more generally:

(Helen Reid)

*****

WHAT'S ON THE RADAR: FOOD DELIVERY STOCKS, RICHEMONT, VALLOUREC (0649 GMT)

European shares are set to slide back on Friday after a rally in the U.S. drove them up to

their best day in three months. Still, the market is far from recovering its losses since the

start of May and the resurgence of a U.S.-China trade war.

A fall in the Chinese yuan below the psychologically important 6.9/dollar level, and tech

giant Baidu swinging to a loss for the first time since listing, could both be part of the drag

on investor sentiment. Traders point to low volumes as one sign investors aren’t convinced by

the rally.

In corporate news, results continue to trickle in while news of Amazon taking a stake in

Deliveroo is set to shake the food delivery sector.

easyJet shares are seen rising 3% despite the budget airline warning of a tough trading

environment, as traders pointed to in-line first half revenues.

Just Eat, Takeaway and Delivery Hero are all expected to fall 2 to 7% after Deliveroo

confirmed Amazon is leading a Series G $575 million funding round in the company.

Luxury goods group Richemont said sales of its watches and jewellery both grew by 10% in the

year to end March with the Americas and Asia performing well. But traders say its operating

profit and margin fell short of expectations, and see the stock falling 3-4%.

Vallourec shares are expected to jump as much as 10% after the steel pipe maker reported a

smaller Q1 loss and confirmed its financial targets for the year.

(Helen Reid)

*****

EASYJET DISAPPOINTS, SAGE SHINES, ADP GETS TOP COURT CLEARANCE (0628 GMT)

EasyJet shares are likely to slide after the budget airline warned of a tough trading

environment, saying revenue per seat in the second half would be down and capacity growth in

2020 would be at the lower end of its historic growth rates.

Software company Sage, on the other hand, delivered strong results and said revenue growth

would be at the top end of its forecast.

A decision from France's top constitutional court to clear privatisation of airport operator

ADP should boost the shares, although they could remain under pressure as opposition lawmakers

seek a referendum to overturn the legislation. News of plans for a public vote sent the stock

tanking last week.

French constitutional court clears ADP privatisation

Britain's easyJet warns of tough trading environment, revenues to be lower

Wagamama deal, pub openings boost Restaurant Group sales

UK software firm Sage expects revenue growth at top end of its forecast

Hikma backs annual outlook boosted by medicine demand

(Helen Reid)

*****

FUTURES SLIDE AS INVESTORS CURB THEIR ENTHUSIASM (0612 GMT)

It looks like all yesterday's enthusiasm has already faded, with futures sliding 0.3 to 0.5

percent in early trade.

The Chinese yuan sliding through the psychologically important 6.9/dollar level, and tech

giant Baidu swinging to a loss for the first time since listing, could both be part of the drag

on investor sentiment which was partly boosted yesterday by strong results from Walmart and

Cisco.

An interesting investment story, Deliveroo says Amazon is leading a new $575 million Series

G funding round alongside existing investors including T. Rowe Price and Fidelity Management.

Among results, luxury goods group Richemont provides an interesting read on the health of

the Chinese consumer, saying sales of its watches and jewellery both grew by 10% in the year to

end March with the Americas and Asia performing well.

Here are your morning headlines:

Richemont posts solid watch and jewellery sales for its full year

Credit Suisse sets up family office services unit for Greater China's rich

GSK and Novartis liniment marketing misled Australian consumers -court

BP faces investor push to beef up fight against climate change

UK's Deliveroo says Amazon heads latest funding round of $575 mln

French Naval Group would look at Thyssen's marine unit if it goes on sale-report

(Helen Reid)

*****

EUROPE HEADS FOR A GAIN ON THE WEEK (0533 GMT)

European shares are seen falling back this morning but should, disasters aside, hold on to a

gain for the week as investors had a more sanguine reaction to an escalation of the U.S.-China

trade war and less highly-valued European stocks started to look more attractive in times of

stress than their expensive U.S. counterparts.

Asian shares were struggling to end a bleak week in the black as upbeat U.S. economic news

and solid company earnings offered only a fleeting respite from the interminable Sino-U.S. trade

dispute.

Financial spreadbetters expect London's FTSE to open 23 points lower at 7,331, Frankfurt's

DAX to open 65 points lower at 12,246, and Paris' CAC to open 24 points lower at 5,424.

(Helen Reid)

*****

(Reporting by Helen Reid, Danilo Masoni, Josephine Mason and Thyagaraju Adinarayan)