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LIVE MARKETS-Let's not hold our breath for Lagarde

* European shares trade higher * Q3 earnings support sentiment * PMIs stagnate * Last ECB meeting for Draghi 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 LET'S NOT HOLD OUR BREATH FOR LAGARDE (1506 GMT) Looking at today's gloomy PMIs, there's a case to despair when considering that ECB launched a new round of stimulus last month, cutting rates deeper in negative rate and relaunching a bond purchase scheme, but Euro zone business activity stagnated in October. How much more can Lagarde do when she takes over from Draghi when interest rates are already below zero, while the ghost of a recession is always behind the corner? "It is always positive when you have action from central banks but we expect those actions to be less effective than previous cycles," says Roland Kaloyan, head of European equity strategy at Société Générale. "We have a pretty cautious position in the market right now. Central banks, particularly the ECB, have already used some of their firepower". By the way we were wrong for Draghi's tie: it was blue! (Joice Alves) ***** WE BET DRAGHI'S TIE WILL SCREAM: "SPEND IT ALREADY!" (1210 GMT) What's in a tie? Part of the fun of covering Draghi's press conference was the speculation on the colour of the tie he would wear and whether that would indicate his next monetary move. So what's in for his last presser given that his ultra-easy monetary policy has just been announced unchanged? "His final choice of tie colour will be of great interest to all. Maybe it will be a novelty bow-tie", Deutsche Bank's Jim Reid speculated. As noted by Oxford Economics, "Mario Draghi will today mark his final European Central Bank Council meeting as ECB President with the bloc’s economy at a near-standstill", not much of a legacy. Many believe (and probably including him) that's not all Super Mario's fault. Draghi could be tempted to tell European leaders they need to sort their own economies via structural reforms and come up with a stimulus of their own. "The continued weak data will only add to the pressure for his successor, Christine Lagarde, to deliver further monetary stimulus, as well as fuelling increasing calls for more fiscal support from eurozone governments", the Oxford Economics note went on. So Draghi's tie will probably try to convey an encouragement to his French successor in getting the Euro zone and its powerhouse Germany to get on with tax cuts and spending as monetary tools have shown their limits inflation wise. "In recognition of its questionable efficacy, Ms Lagarde also called upon eurozone governments to launch a round of fiscal stimulus, having one week earlier called for budget laws dictating said spending to be reformed", BNY Mellon strategist Neil Mellor wrote. "And as an onlooker, Mr. Draghi would certainly be forgiven for thinking, 'well, good luck with that', Mellor concluded. Yellow is said to be the colour of hope so we're betting Draghi's tie is bound to be yellow. The below image shows the changes in the policy statement from the September meeting. As you can see, it's much shorter this time round. (Julien Ponthus and Ritvik Carvalho) **** DAIMLER AND BASF: AN INSIGHT INTO "THE EUROPEAN OPPORTUNITY" (1138 GMT) European shares have managed to shrug off another batch of poor macro data, supported by a positive reaction to earning updates from heavyweights Daimler and BASF that have helped drive the DAX to a 16-month high. Chris Bailey, Raymond James' European Strategist, believes those results provide an insight into why investors should start looking with more favour to the unloved European equity space. "Their numbers aren't great and guidance isn't perfect but it's not getting any worse," he says. "Looking at the shares, their reaction is absolutely correct: it's not off the numbers but off the fact things are stabilising". "That's a good insight into the reality of the European opportunity," he adds. "Brexit is getting a little bit clearer, slowly. The world trade backdrop is a little better. You put all those things together - world trade, Brexit, continuation of loose (monetary) policy, very low expectations - I think you can make a contrarian story for pan-European equities," he adds. (Danilo Masoni) ***** OPENING SNAPSHOT: NOKIA TANKS, DAX AT 16-MONTH HIGH (0737 GMT) European shares are off to a positive start with the DAX leading the way, up 0.7% to its highest since mid-June 2018, as auto stocks get a lift after a well-received update from Daimler . A profit warning from Nokia is however a big dampener with its shares falling more than 20% to their lowest in over 6 years, overshadowing the uplift from better than expected results from Apple suppliers STMicro and Dialog. Europe's tech index is down 1%, leading sectoral losers. As the earnings season gathers plenty of steam other top moves on the STOXX 600 are also driven by earning updates. Atos has shot up 6% after its Q3 organic growth beat expectations, on the same day that France proposed the technology group's CEO Thierry Breton as its candidate to head industrial policy in the next European Commission. Kion Group is rallying 12% after reporting better than expected results across its business units. An earnings miss however has sent shares in TechnipFMC down 9.2%. Here's your opening snapshot: (Danilo Masoni) ***** WHAT'S ON OUR RADAR: NOKIA, DAIMLER AND CHIPS (0655 GMT) European shares are set to edge up as investors digest a wave of earnings updates and with growing confidence over a Brexit deal helping keep major benchmarks near recent highs, while the FTSE struggles to recover as hopes of an orderly UK-EU divorce keep sterling supported. Futures on the DAX are up 0.3% after hitting their highest in 15 months and euro zone futures rise 0.2% just ahead of the release of the flash PMI surveys for October, which will be closely watched for any sign of a recovery following a string of macro disappointments. FTSE futures are flat. In earning updates, Nokia is set to slump heavily at the open after it reported Q3 profit in-line with expectations but lowered its full-year profit forecasts for 2019 and 2020, citing tough competition and additional investments. Its shares are seen down 7-15%. On a more positive note Daimler shares are seen rising after Q3 EBIT growth beat expectations. The company announced cost cuts as it reduced its revenue outlook for Mercedes-Benz trucks unit but Q3 EBIT before rose 8% to 2.69 billion euros. Its results follow disappointing numbers from Ford which cut its operating profit forecast, highlighting the challenges for the export oriented sector. Among chipmakers, results from Apple suppliers Dialog Semi and STM both beat earning expectations. Dialog shares are up 3.7% in early Frankfurt trade. That could support the tech sector after Microsoft forecast sales for its cloud computing services that topped expectations, sending its shares up slightly. Royal Bank of Scotland swung to a Q3 loss, after making a fresh 900 million pound provision to settle mis-selling claims in Britain's biggest consumer banking scandal. One trader sees its shares down 3% at the open. Other stock movers: New York, states reach $700 mln settlement with Reckitt over opioid probes; Nordea's Q3 earnings take 1.3 bln euro hit as new CEO takes over; Norwegian Air secures Airbus fleet deal, earnings top forecast; Puma ups guidance despite U.S. tariffs on China; Equinor Q3 profit drops more than expected on low gas sales; BASF operating profit dives 24% as trade disputes weigh; AstraZeneca lifts drug sales forecast on China, cancer gains; China demand drives sales bounce at Birkin bag maker Hermes. (Danilo Masoni) ***** A WAVE OF EARNINGS (0550 GMT) It's already getting really busy with earnigs updates across Europe. Just look at the headlines below, and more are to come: Nokia cuts full-year profit outlook on tough competition Daimler Q3 operating profit down 8% on weaker car and truck sales Alfa Laval Q3 core profit tops forecasts Nordea's Q3 earnings take 1.3 bln euro hit as new CEO takes over Sika's 9-month operating profit rises, confirms FY target Norwegian Air Q3 profit beats forecast Schindler Q3 profit rises on strong Asia-Pacific, China growth Equinor Q3 profit drops more than expected on low gas sales BASF operating profit down 24% as trade disputes weigh Swiss engineer ABB's earnings offer some relief as U.S., China weaken New York, states reach $700 mln settlement with Reckitt over opioid probes GSK gets FDA nod for wider use of ovarian cancer drug Zejula (Danilo Masoni) ***** European shares are expected to open little changed with euro zone benchmarks staying near recent highs and the FTSE struggling to recover meaningful from its recent slump as investors expect the EU to grant another delay to the Brexit deadline, avoiding a chaotic exit of the country from the bloc. Pending fresh developments over Brexit, investors' immediate focus will shift today the flash PMIs for October which will be closely watched for any sign of a recovery in Europe's poor economic conditions, and to the European Central Bank's policy meeting, the last one under the leadership of Mario Draghi. Of course eyes will remained glued to the Q3 earnings season. From the US a surprise profit at Tesla sent its shares soaring overnight, while Microsoft's forecast for sales of its cloud services topped estimates, even as quarterly growth slows for its Azure business. Ford, however, cut its operating profit forecast after a disappointing Q3. Spreadbetters at IG expect London's FTSE to open 8 points lower at 7,253, Frankfurt's DAX to open 9 points higher at 12,808 and Paris' CAC to open 4 points higher at 5,658. (Danilo Masoni) ***** (Reporting by Danilo Masoni, Joice Alves, Julien Ponthus and Thyagaraju Adinarayan)