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LIVE MARKETS-Europe in tentative recovery

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Josephine Mason. Reach her on Messenger to share your thoughts on market moves: josephine.mason.thomsonreuters.com@reuters.net

EUROPE IN TENTATIVE RECOVERY (0617 GMT)

Europe's stock futures are staging a very tentative recovery from a punishing three-day sell-off that knocked more than 5% of the pan European STOXX 600 index as nervous investors return to riskier assets and seek out bargains amid continued worries about the escalating trade war between Washington and Beijing.

Still, Wall Street futures are firmly in the red - down about 0.4%.

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"We've gone from being hopeful a couple of weeks ago that talks in Shanghai would aid progress towards a deal and the removal of tariffs, to new tariffs, China no longer buying US agricultural goods and the US labeling China a currency manipulator. That's some escalation in a little over a week," says Craig Erlam, senior market analyst UK & EMEA at Oanda.

Investors are also digesting comments from the Fed's James Bullard, which suggested that a rate cut in September is far from guaranteed. The market currently sees a 70% chance of another 25 bps cut.

(Josephine Mason)

ON OUR RADAR: BANKS AND M&A (0558 GMT)

Concerns about the health of corporate Europe are deepening as Q2 results season continues (this morning, there's a flurry of bank results).

The latest data from I/B/E/S Refinitiv shows analysts now expect companies listed on the pan-European STOXX 600 index to report a drop in earnings in the second and third quarters of 2019, which marks a severe deterioration from just a week ago.

If it happens, that would be a prolonged corporate recession lasting at least three quarters (Q1 earnings dropped 2%), the first since 2016.

Back to today with a mixed bag of results from financial services companies - Italy's biggest bank by assets UniCredit has cut its revenue target for 2019 due to expectations of lower for longer interest rates, while the country's No. 3 lender, Banco BPM , reported a sharp rise in net profit for the three months through June helped by capital gains and an improvement in core revenues.

Dutch bank ABN Amro delivered an unexpected 1% rise in Q2 net profit to 693 million euros ($777 million), as interest income rose and impairments on bad loans decreased.

Germany's Commerzbank saw Q2 net profit little changed from a year ago, helped by low taxes, but said its target for a slight increase in full-year net profit had become "significantly more ambitious".

Payments company Wirecard has raised its 2019 outlook after reporting new client wins, including Germany's ALDI supermarket chains, as it reported a 35.6% gain in core profits in the second quarter.

In M&A, France's CNP Assurances and Italy's Cattolica Assicurazioni are among a series of European bidders looking to submit binding offers for a controlling stake in the insurance arm of Italian lender UBI Banca.

In other dealmaking, German chemical groups Bayer and Lanxess have agreed to sell chemical park operator Currenta to Macquarie Infrastructure and Real Assets (MIRA) for an enterprise value of 3.5 billion euros ($3.9 billion).

The U.S. Food and Drug Administration said that some data from early testing of Novartis' more than $2 million gene therapy Zolgensma was manipulated, although the agency believes the treatment should remain on the market.

Here are your early headlines:

Wirecard nudges up 2019 guidance on the back of Q2 momentum

HSBC Global Asset Management names Nicolas Moreau as CEO

ProSieben Q2 revenues ahead 4% as growth areas offset TV ad slide

Munich Re Q2 net profit up 36%, maintains 2019 profit forecast

U.S. FDA says some data testing Novartis' $2 mln gene therapy was manipulated

Lanxess, Bayer sell chemical park operator to Macquarie for $3.9 bln

Commerzbank posts flat net profit in Q2, helped by low taxes

EXCLUSIVE-Airbus plans A321 Toulouse expansion in traces of axed superjumbo

ABN Amro tops estimates with modest Q2 profit rise

Ahold second-quarter underlying earnings hit by April strike

Italy's Banco BPM profit jumps on one-offs, improving revenues

CNP Assurances and Cattolica among bidders for UBI's insurance arm - sources

E.ON's Q2 retail profits slide as Britain continues to weigh

Glencore to halt production at world's largest cobalt mine - FT

(Josephine Mason)

*****

EUROPE PAUSING FOR BREATH (0516 GMT)

After yesterday's choppy session, European stocks are expected to recoup some of the recent losses soothed by the gains overnight in Asia and on Wall Street after China's move to fix the yuan at a slightly stronger rate and White House economic adviser Larry Kudlow's comment that President Donald Trump was planning to host a Chinese delegation for talks in September.

That allayed fears of a further escalation in the trade war.

After a bruising sell-off which saw three straight days of losses, IG financial spreadbetters expect London's FTSE to open 1 point higher at 7,173, Frankfurt's DAX to open 26 points higher at 11,594, and Paris' CAC to open 5 points higher at 5,239.

(Josephine Mason)

*****

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