LIVE MARKETS-Italy, now what? Will it last? Will they deliver?

* European stocks open slightly higher

* Trade concerns weigh on Asian shares

* Italian president invites political novice Conte to be prime minister

* Deutsche Bank (IOB: 0H7D.IL - news) cuts 7.000 jobs

LONDON, May 24 (Reuters) - Welcome to the home for real-time coverage of European equity

markets brought to you by Reuters stocks reporters and anchored today by Kit Rees. Reach her on

Messenger to share your thoughts on market moves: kit.rees.thomsonreuters.com@reuters.net

ITALY, NOW WHAT? WILL IT LAST? WILL THEY DELIVER? (1050 GMT)

Italian markets are seeing some respite today after President Sergio Mattarella gave

political novice Giuseppe Conte a mandate to form a government, but the political situation in

Rome is far from settled and further bouts of selling pressure cannot be ruled out.

Here are a few takes on what to expect next now that the little-known Florence law professor

has been tasked to lead the first Italian government made up of anti-establishment parties.

* Matteo Ramenghi, CIO for Italy, UBS Global Wealth Management: "If Conte wins a confidence

vote

in parliament, M5S-Lega would have a thin majority in the senate; and given the two parties have

very different backgrounds, the government's lifespan would be in question."

* Adrian Hilton, Head of Global Rates and Currency at Columbia Threadneedle Investments:

"Developments in Italy over the past few weeks clearly present a risk for Italian assets and

also possibly for Europe. But the full extent of the damage will become clear only when the

tenuous contract between left-wing and right-wing coalition allies is converted into policy."

* Fabio Fois, European Economist at Barclays (LSE: BARC.L - news) : "We remain of the view it will be difficult

for a

5SM-L led government to approve in full their economic programme.... constraints to the

implementation of the economic programme pledged by 5SM and L could affect the duration and

stability of the legislature, unless 5SM and L do not soften considerably their stance."

And here's what Conte (pictured) told reporters late yesterday after holding two hours of

talks with Mattarella: "I will be the defense lawyer for the Italian people."

(Danilo Masoni)

*****

A CRYSTAL CLEAR CONSENSUS AGAINST EUROPEAN BANKS (1045 GMT)

"Banks remain the biggest underweight of mutual funds and an increasing number of active

managers have reduced further their exposure in this sector", Goldman Sachs (NYSE: GS-PB - news) found after a review

of 780 funds which invest in European Equities.

"Generally, we find that, despite short-term price movements, active managers remain

underweight sectors which have often been considered ‘value traps’ since the Global Financial

Crisis (GFC): Banks, Autos, Utilities and Oil & Gas."

It's true that banks have persistently failed to deliver for those who believed their were

the best way to surf the now fading Euroboom or the ECB's ever-elusive path towards monetary

normalisation.

The woes of the sector are also still in the open with Deutsche Bank cutting more than 7,000

jobs to reduce costs and restore profitability.

Here's Goldman Sachs chart which shows how active managers are clearly staying away from the

sector:

Talking about value traps, here's Euro zone banks versus the broader Euro Stoxx since 2009:

(Julien Ponthus)

*****

OPENING SNAPSHOT: AUTOS SKID, ARYZTA SINKS (0720 GMT)

It's a bad start to the day for autos stocks, with BMW (EUREX: BMWE.EX - news) , Daimler (IOB: 0NXX.IL - news) , and Volkswagen (IOB: 0P6N.IL - news) driving the

DAX down, falling 2 to 2.3 percent after the U.S. launched a probe into autos tariffs and

Beijing replied that it would defend its interests. Renault (LSE: 0NQF.L - news) and Peugeot (Other OTC: PUGOF - news) are also falling around

0.4 percent, and Europe's autos sector is down 1.2 percent.

Not looking good for Swiss specialty baking company Aryzta (IOB: 0MFY.IL - news) either. Its shares are

sinking 25 percent to a new record low, bottom of the STOXX after yet another profit warning.

On the positive side Electrocomponents (LSE: ECM.L - news) is jumping 7.6 percent after it increased its

full-year dividend and announced an acquisition. Tate & Lyle (LSE: TATE.L - news) is another gainer after

results, up 4.3 percent.

And Paddy Power Betfair is feeling the glow after it merged its U.S. business with

Fanduel. The gambling company's shares are up 2.6 percent.

(Helen Reid)

*****

WHAT TO WATCH AHEAD OF THE EUROPEAN OPEN (0649 GMT)

Stocks futures are pointing to another day in negative territory for European equities as

uncertainty over U.S.-China trade talks and concerns over the new coalition’s spending plans in

Italy overshadow the Federal Reserve’s more gradual approach to rate hikes, as per the FOMC

minutes.

Autos stocks are indicated to fall today after the U.S. launched a national security

investigation into car and truck imports – the worry is that this could lead to new U.S. tariffs

and potential pain for German automakers in particular as the United States is its

second-biggest export market after China.

In terms of a U.S.-China trade deal, Trump has said that it would need “a different

structure”, adding more uncertainty.

Among corporate news, Deutsche Bank is shaking things up with plans to cut thousands of

staff to reduce costs and boost profitability. Equities sales and trading is set to see a 25

percent reduction in headcount. All eyes will now be on today’s AGM. DB’s shares are down more

than 31 percent so far this year, so this could be welcome news for frustrated investors.

Stock movers/company news:

Deutsche Bank to cut thousands of staff in investment bank revamp [nL5N1SV0RG

Sales at Britain's Kingfisher (Frankfurt: 812861 - news) mauled by Beast from the East

Paddy Power Betfair (Other OTC: PDYPF - news) merging U.S business with FanDuel

Deutsche Telekom (IOB: 0MPH.IL - news) to tie dividends to growing bottom-line profits

Westfield (Frankfurt: A113BB - news) shareholders approve $16 bln Unibail-Rodamco (Brussels: NL0000288652.BR - news) deal

German carmakers' shares seen down on US auto tariffs probe

Elliott eyes operational improvements after taking Thyssen stake

Novartis (IOB: 0QLR.IL - news) receives EU approval for biosimilar Zessly

British lender Paragon (IOB: 0NFG.IL - news) 's H1 profit up 4.7 pct

Go-Ahead upgrades profit after greater efficiency boosts rail

Aryzta further cuts full-year EBITDA guidance

Payments firm Adyen to list in Amsterdam in June

Vontobel to buy private bank from Raiffeisen for $700 mln

EUROPEAN STOCKS FUTURES DIP SLIGHTLY (0613 GMT)

European stocks futures have opened broadly lower this morning as traders keep an eye on

political developments in Italy and trade talks between the U.S. and China.

Here's your futures snapshot:

(Kit Rees)

*****

WHAT'S ON THE EUROPEAN EARNINGS AGENDA (0555 GMT)

It's pretty light on the corporate earnings side today but we do have a few full-year

updates from the likes of Tate & Lyle, United Utilities (LSE: UU.L - news) and a trading update from Inchcape (Other OTC: IHCPF - news) in

the UK.

Here's a list of European companies reporting results today:

VIEV.VI Q1 2018 Flughafen Wien AG Earnings Release

UNIQ.VI Q1 2018 UNIQA Insurance Group AG Earnings Release

BAVA.CO Q1 2018 Bavarian Nordic A/S Earnings Release

A8AG.DE Q1 2018 JDC Group AG Earnings Release

NETG.TE Q1 2018 Net Gaming Europe AB Earnings Release

PENO.OL Q1 2018 Panoro Energy ASA Earnings Release

KAMUX.HE Q1 2018 Kamux Oyj Earnings Release

TATE.L Full Year 2018 Tate & Lyle PLC Earnings Release

UU.L Full Year 2018 United Utilities Group PLC Earnings Release

ECM.L Full Year 2018 Electrocomponents PLC Earnings Release

INCH.L Q1 2018 Inchcape PLC Trading Statement Release

CLDN.L Full Year 2017 Caledonia Investments PLC Earnings Release

GOG.L Q3 2017 Go-Ahead Group PLC Trading Statement Release

RWI.L Preliminary Q4 2018 Renewi PLC Earnings Release

(Kit Rees)

*****

MORNING CALL: EUROPEAN STOCKS SET FOR STEADY OPEN (0533 GMT)

Good morning. Following on from yesterday's negative session, European stocks are set to

start today's trading flat to slightly lower, according to financial spreadbetters, as markets

continue to mull the implications of the proposed spending spree from Italy's anti-establishment

coalition.

Britain's FTSE 100 is seen opening 5 points lower, Germany's DAX is expected to lose 4

points and France's CAC is seen opening flat, according to financial spreadbetters.

However, there may be some support for equities from the U.S. Federal Reserve's minutes,

which indicated a gradual approach to rate hikes, which boosted Wall Street slightly. China and

Hong Kong stocks were a touch lower as uncertainty over U.S.-China trade talks sparked caution.

(Kit Rees)

(Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)