LIVE MARKETS-Will Draghi press on the accelerator?

* European shares dip from 2-week highs, STOXX down 0.2% * Euro zone business growth stalls in July, outlook darkens * Earnings in focus in Europe and U.S. ahead of ECB meeting * Deutsche Bank posts 3.15 bln euro Q2 loss, shares fall * Chips rally after ASMI, Texas Instruments results * Signs of progress in trade talks support Asian shares 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 WILL DRAGHI PRESS ON THE ACCELERATOR? (0944 GMT) Euro-zone PMI data have underscored weakness in the region's economy with a German manufacturing recession deepening further this month just before tomorrow's ECB meeting where the central bank is likely to signal a dovish policy turn. Consensus is for the ECB to cut its deposit rate in September and while today's data may not be enough for immediate action it will surely give more ammunition to the doves. "PMIs are a gift to Draghi who will have one more reason to press on the accelerator," says Marco Vailati, head of research and investment at Cassa Lombard in Milan. "Most likely still only with words," he adds. Vailati says he still expects a rate cut along with a relaunch of QE in September when the ECB is due to update its macro forecasts. ING is less certain about timing of possible action. "The PMI paints a picture of an economy that is flirting more with the downside than with swift recovery. More ECB stimulus seems to be a done deal, but the timing remains an exciting question," writes ING senior economist Bert Colijn. "If the ECB has yet to decide whether it is already tomorrow or September when it will act, this PMI has given the doves on the governing council even more ammunition," he adds. Euro-zone banks hit their day low after the data, the latest news to send shudders through the sector struggling with lower-for-longer rates while Deutsche Bank nurses a massive $3.5 billion loss in the second quarter. Eurozone shares have also taken a turn lower after the data, likely suggesting no major change in expectations about the easing path of the ECB, which had contributed to support shares over the past few days. Bond yields fell further. (Danilo Masoni) ***** STOXX STEADY, DB DOWN, ASMI ADDS SHINE TO CHIPS, ITV TOP GAINER (0732 GMT) The pan-European STOXX 600 benchmark is managing to hold near the over two-week highs hit in the previous session, trading just about flat as investors digest a deluge of earnings. Banks have pulled back after strong gains yesterday with Deutsche Bank down 2.5% after it posted a larger-than-expected loss of 3.15 billion euros ($3.5 billion) in the second quarter due to major restructuring costs. Chips instead continue to shine as Dutch semiconductor supplier ASM International reported a 25% increase in Q2 revenue, beating expectations, adding to a string of good earnings news in the sector. Its shares are up 5.3% at record highs. On Tuesday Apple supplier AMS delivered a strong update and Texas Instruments beat Q2 earnings and sales estimates overnight. Among the top gainers on the STOXX is ITV, up 7% after Britain's biggest free-to-air commercial broadcaster said a strong contribution to online revenue from reality show "Love Island" helped limit the decline in total ad revenue to 5% in the first half of the year. A disappointing update due to damage from the U.S.-China trade war however has hit specialty chemicals maker Croda, which fell 5%, and luxury carmaker Aston Martin has lost almost a quarter of its value in early deals after cutting its FY forecasts and warning about persistent weakness in the UK and Europe. Worries about the health of corporate Europe are keeping a lid on gains - data from I/B/E/S Refinitiv shows STOXX 600-listed companies are expected to report a 0.5% drop in Q2 earnings, a reversal from 0.2% growth estimated a week ago. That would also mark a company recession after a drop in Q1. Later in the day Wall Street heavyweights may steal the show in earnings with results due from companies of thecaliber of Facebook, Caterpillar, and Boeing. Here's your opening snapshot: (Danilo Masoni) ****** EUROPE TO STEADY NEAR 2-WEEK HIGH AS EARNINGS ROLL IN (0658 GMT) European shares are expected to open flat to slightly lower after hitting over two-week highs in the previous session, in another heavy day for earnings updates and with the immediate focus turning to the release of PMI data before tomorrow's ECB meeting where the central bank is expected to prepare the ground for a rate cut in September. Futures on main country benchmarks are all lower except for Spain's IBEX which are flat. After strong gains in the previous session on the back of solid updates from Santander and UBS, banks are set to be weighed down after Deutsche Bank posted a larger-than-expected loss of 3.15 billion euros ($3.5 billion) in the second quarter due to major restructuring costs. DB shares are down 4.7% in early Frankfurt trade. In autos, Daimler shares are up 0.9% in early Frankfurt trade as the luxury car maker said it would intensify cost cuts after legal risks for diesel-related issues and the cost of replacing Takata airbags triggered a 1.56 billion euros loss before interest and taxes in Q2. Earlier this month, Daimler pre-released earnings in what amounted to its fourth profit warning in 13 months. In France, PSA Group delivered a sharp increase in H1 profit, as new models and the integration of Opel-Vauxhall more than made up for weaker emerging-market sales. Traders see PSA shares rising 1-3% at the open. Aston Martin has however cut its 2019 forecasts on UK, Europe weakness and Japan's Nissan is planning job cuts of more than 10,000, the latest bad news from the troubled sector. Following a strong update from Apple supplier AMS on Tuesday, chipmakers could find further support after Texas Instruments Q2 earnings and sales beat estimates, soothing demand jitters and sending its shares up sharply. In Europe, Dutch semiconductor supplier ASM International reported a 25% increase in Q2 revenue, beating expectations, driven by its logic chips and fabrication business. Fresh signs of progress in Sino-US trade talks are also helping chips and other trade exposed sectors. Shares in Covestro are rising 1.8% in early trade after the chemicals maker confirmed its FY core profit outlook, saying it met its Q2 targets despite challenging global economic conditions. A solid update also from paints and coatings maker Akzo Nobel posted a better-than-expected 36% jump in Q2 core profit, as higher prices and cost savings offset raw material inflation. In other encouraging earnings news, Swiss drug ingredients maker Lonza Group confirmed FY targets, lifting its shares 1.1% premarket, even though H1 profit plunged as it took losses linked to the sale of its water business and as difficulties at its specialty ingredients business continued. Telefonica Deutschland also rose in early Frankfurt trade after results. In dealmaking and share moves, Hugo Boss shares are down 2.8& in early trade after a share placement from shareholder Xinglee, while Metro is down 2.7% in premarket after it recommended its shareholders not to accept a takeover offer by EP Global Commerce. Other stock movers: Clariant CEO exits after 10 months amid key talks with SABIC Love Island delivers for ITV in tough ad market UK chemicals firm Croda unit hit by U.S.-China trade war Spain's Iberdrola boosts profit forecast as H1 earnings rise T-Mobile parent Deutsche Telekom schedules meeting as Sprint deal nears approval - report Tullow Oil restores dividends with $33 mln payout KPN core profits gain despite network outage, CEO exit Skanska Q2 operating profit above forecast (Danilo Masoni) ***** HEADLINES ROUNDUP: EARNINGS, EARNINGS, EARNINGS (0554 GMT) Turning to the corporate front, it's all about earnings updates this morning. Deutsche Bank posted a Q2 loss of 3.15 billion euros as a result of costs for a major restructuring, while Daimler said it would intensify cost cuts after legal risks for diesel-related helped trigger a 1.56 billion euros loss before interest and taxes in Q2. The impact of these updates may partly be price in already as DB had already indicated the magnitude of its loss when it announced its restrucuring earlier this month, while Daimler pre-released earnings earlier this month in what amounted to its fourth profit warning in 13 months. In more upbeat releases, paints and coatings maker Akzo Nobel posted a better-than-expected 36% jump in Q2 core profit, as higher prices and cost savings offset raw material inflation, while chemicals maker Covestro confirmed its FY core profit outlook, saying it met its Q2 targets despite challenging global economic conditions, competitive pressures and weakness in the automotive industry. In autos, PSA Group delivered a sharp increase in first-half profit, as new models and the integration of Opel-Vauxhall more than made up for weaker emerging-market sales. Here are other headlines that may move markets this morning: Lonza H1 profit plunges, says on track to hit full-year goals KPN core profits gain despite network outage, CEO exit Sulzer raises full-year sales outlook after seeing no signs of slowdown EFG reports increase in assets under management in H1 Skanska Q2 operating profit above forecast Clariant CEO exits after less than a year on the job TIM to announce towers deal, 5G partnership with Vodafone on July 26 - source (Danilo Masoni) ***** EUROPE SEEN HIGHER AHEAD OF PMI DATA (0530 GMT) European shares are set for a stronger open in another heavy day for earnings updates and with the immediate focus turning to the release of PMI data later on ahead of tomorrow's ECB meeting where the central bank is expected to prepare the ground for a rate cut in September. Following slight gains in Asia overnight on hints of progress in the Sino-U.S. trade saga, spreadbetters at IG expect London's FTSE to open 8 points higher at 7,565, Frankfurt's DAX to open 46 points up at 12,537, and Paris' CAC to open 12 points higher at 5,630. A disappointment on the PMI front, however, could erode possible gains. "Today's flash manufacturing and services PMIs from France and Germany could prompt further weakness this morning if the weakness seen in the manufacturing numbers in recent months starts to bleed into the services sector," says Michael Hewson, analyst CMC Markets. In corporate news, Deutsche Bank posted a Q2 loss of 3.15 billion euros as a result of costs for a major restructuring, while Daimler said it would intensify cost cuts after legal risks for diesel-related helped trigger a 1.56 billion euros loss before interest and taxes in Q2. Later in the day the focus will shift to earnings from Wall Street companies of the caliber of Facebook, Caterpillar, and Boeing. (Danilo Masoni) ***** ($1 = 0.8968 euros) ($1 = 0.8974 euros) (Reporting by Danilo Masoni, Josephine Mason and Thyagaraju Adinarayan)