LIVE MARKETS-Not yet good old melt-up days but still!

Jan 18 - Welcome to the home for real-time coverage of European equity markets brought to

you by Reuters stocks reporters and anchored today by Julien Ponthus. Reach him on Messenger to

share your thoughts on market moves: julien.ponthus.thomsonreuters.com@reuters.net

NOT YET GOOD OLD MELT-UP DAYS BUT STILL! (1129 GMT)

World stocks are set for a fourth straight week of gains, an achievement not

seen since July.

We're clearly not back at the stage when TEN winning weeks between the end of November 2017

and January 2018 got investors worried about a melt-up and that the surge in stock markets was

so overwhelming that it could only end in tears.

Still, things are looking up it seems.

"Sentiment is clearly improving and the bulls are gathering momentum as previous headwinds

slowly morph into tailwinds for the markets," comments Oanda analyst Craig Erlam.

Fidelity's multi-asset fund has also shifted to overweight equities and fixed income, and

underweight cash, it announced earlier.

(Julien Ponthus)

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OPENING SNAPSHOT: EUROPE RALLIES TO 6-WEEK HIGHS (0844 GMT)

European shares are rallying into the weekend amid renewed optimism over Washington's

festering trade spat with Beijing, with pan European STOXX 600 hitting its highest since Dec (Shanghai: 600875.SS - news) . 5

and on pace for its third straight weekly gain. Trade-sensitive mining, oil & gas, autos and

banking stocks are leading the gains.

The main bourses are up between 0.9 and 1 percent in early deals.

Among the individual moves, a profit warning from Ryanair is punishing low-cost airline

stocks, with UK rival easyJet down 2.3 pct and Telecom Italia (Amsterdam: TI6.AS - news) has plunged 8 percent to the

bottom of Milan's main bourse and the STOXX 600 after its forecast that FY organic EBITDA will

drop slightly.

Casino provided some cheer to the battered retail sector, standing by its guidance despite

the damage from the protests that has swept France over the past few months.

ON THE RADAR AT THE OPEN: M&A, EARNINGS AND SO MUCH MORE THAN TRADE (0743 GMT)

Trade war optimism is expected to lift European stock markets this morning after having

boosted shares on Wall Street and Asia.

Futures on both sides of the Atlantic (Shanghai: 600558.SS - news) are up, even if the rises are not in the “irrational

exuberance” league: up 0.6 pct at the most for the IBEX.

Not much macro but UK retail data at 0930 GMT will be closely watch with the British high

street and its flagships being under so much stress.

In terms of corporate news, M&A is spicing things up in the telecom sector with France’s

Orange (LSE: 0OQV.L - news) reportedly considering a bid for Spain’s Euskatel. Still in the sector, Telecom Italia

has said it expects 2018 core earnings to drop by less than 5 pct.

As the earnings season starts to build up in Europe, expectations are low. According to

I/B/E/S Refinitiv, fourth-quarter earnings per share (EPS) for STOXX 600 companies are expected

to have grown by 6 percent, more than half the levels seen in Q3 and Q4 2017.

Hellofresh is expected to surge at the open after saying it expects revenues above its

forecast.

Supermarket retailer Casino, which is battling investor concerns over its high debt, said

revenue growth slowed down slightly in the fourth quarter as anti-government protests in France

impacted sales at its Geant hypermarkets. Its shares are seen rising at the open.

Irish low-cost carrier Ryanair Holdings (Frankfurt: RY4C.F - news) cut its forecast range for full-year profit, as it

expects fares during the winter season to fall more than expected, news that will likely dent

the shares.

Another development on the Ghosn/Renault (LSE: 0NQF.L - news) with news the CEO improperly received 7.8 million

euros ($9 million) in compensation from a joint venture (JV) between Nissan and Mitsubishi (LSE: 7035.L - news) .

In the banking sector, which received a blow from SocGen’s profit warning yesterday, Italy's

Banca Carige (Dusseldorf: -BJ51.DU - news) has filed a request to tap a state guarantee for an upcoming bond issue.

Here's a list of key headlines:

ANALYSIS-Reality check for Europe Inc: investors brace for bumpy Q4 results season

Ghosn received $9 mln improperly from Nissan-Mitsubishi JV -companies

Rio Tinto (Hanover: CRA1.HA - news) 's 2019 iron ore guidance at lower end of forecasts

U.S. grand jury indicts 4 Audi (IOB: 0FG8.IL - news) managers in VW emissions probe

FDA advisory panel split over Sanofi (LSE: 0O59.L - news) -Lexicon diabetes drug

Car (HKSE: 0699-OL.HK - news) service firm Mekonomen (LSE: 0HDJ.L - news) warns on profit, European market "abnormally weak"

Telecom Italia sees FY organic EBITDA at 8.1 bln euros

Italy's Carige could get green light for state-backed bond issue soon - minister

Fitch Downgrades Carige to 'CCC'; on Rating Watch Evolving

Retailer Casino keeps goals although French protests impacted sales

Lagardère Announces Exclusive Negotiations For The Sale Of Billetreduc.Com to FNAC Darty

Takeaway.com Raises EUR 680 Mln Via New Shares And Convertible Bonds Issue

Eni Says Board Of Directors Approves Bond Issue

(Julien Ponthus and Josephine Mason)

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AND UP IT IS! (0709 GMT)

European futures have opened and they're comfortably up as expected with the trade war

optimism doing its magic.

Futures on the other side of the Atlantic are also in the black, which seems to indicate

that global sentiment is indeed positive.

(Julien Ponthus)

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TRADE HOPES SEEN LIFTING EUROPEAN SHARES AT THE OPEN (0620 GMT)

Optimism about the Sino (Dusseldorf: 1205802.DU - news) /U.S. trade talks has lifted stocks from Wall Street to Asia and

there's really no reason it wouldn't fuel some good old risk-on across European bourses.

According to IG (Frankfurt: A0EARV - news) , financial spreadbetters expect London's FTSE to open 36 points higher,

Frankfurt's DAX up 45 points and Paris' CAC to rise 28 points.

That said, as usual with the trade war saga, sentiment could change quickly as the U.S.

position is not crystal clear.

The Wall Street Journal reported that Mnuchin discussed lifting some or all tariffs and

suggested offering a tariff rollback during trade discussions BUT also that Trade Representative

Robert Lighthizer has resisted the idea.

Here's the story:

Treasury Secretary Mnuchin weighs lifting tariffs on China-WSJ

(Julien Ponthus)

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