LIVE MARKETS-The unloved 25% rally in Europe

* European futures in positive territory

* Crude oil prices jump

* Big Q1 earnings day

* Spie, AMS, Teleperformance jump Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters. You can share your thoughts with Thyagaraju Adinarayan (thyagaraju.adinarayan@thomsonreuters.com), Joice Alves (joice.alves@thomsonreuters.com) and Julien Ponthus (julien.ponthus@thomsonreuters.com) in London and Stefano Rebaudo (stefano.rebaudo@thomsonreuters.com) in Milan.

THE UNLOVED 25% RALLY IN EUROPE (0828 GMT)

The 25% equity rally since its recent lows was quite impressive and quick too, but not so solid, as investors' mood is still sour pointing to more pain trade coming. Barclays paints this picture with a set of flow numbers showing risk aversion, particularly for European stocks.

Fund flows confirm the risk-off mood as U.S., Japan and UK had inflows, month to date, while Europe and emerging markets did not.

Investors participation was light and "equity volumes dried after up after the surge seen in March." Mutual funds added to cash at an unprecedented level.

Up to now also systematic investors, risk-parity funds and high frequency traders "did not raise their exposure", even if they could in the future if volatility keeps falling.

No bids came from corporates as buybacks stalled.

But since stocks are propped up by safety trades, the investment bank expects a "a 'risk-on' style rotation rather than another leg down" in the near-term.

(Stefano Rebaudo)

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OPENING SNAPSHOT: CURB YOUR Q1 ENTHUSIAM (0755 GMT)

Serioulsy who would have thought?

Many companies reporting Q1 results this morning have seen their share price skyrocket in early trading, which surely illustrates how much bad news had already been priced in and how traders are psychologically open to being pleasantly surprised.

Sensor specialist AMS, France's Teleperformance and Spie are on top of the STOXX 600 with rises close or above 2 digits.

The banking sector, one of the big loser of the crisis, is one of the session's main winner with the sector up 1%.

Barclays and Standard Chartered are up close to 5% after updating the market on their incoming virus triggered loan losses. Both banks saw their profits fall but Deutsche Banks, which swang to a loss, was also up, albeit less so, by 3%.

Another winner in the sector was Nordea Bank, up 3%, which reported a 4% increase in first-quarter net profit well above market expectations.

A good surprise was also Volkswagen announcing that it expected to be profitable in 2020. The car maker is up 1% and the rest of the sector is also well in the black.

Other blue chips published tough trading updates but didn't get hammered for it.

Airbus, which saw profits halve in Q1, saw its shares initially rise before gently retreating to -0.8%.

Anyhow, while there are definitely pockets of enthusiasm across the market, it's fair to say that overall, it's curbed.

A good reminder of the recession to come is airline group IAG falling 5% after launching a plan to shrink its main British Airways business by axing staff numbers by a quarter.

The STOXX 600 is flat and European stock markets overall seem ready, as expected, to take a breather after two days of strong gains.

(Julien Ponthus)

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ON THE RADAR: VOLKSWAGEN, DAIMLER, AIRLINERS (0640 GMT)

Futures on European bourses are hovering just above the floating line as the market is set to pause for breather after a two-day rally.

On the corporate front, expectations for the third quarter results continue to deteriorate, according to Refinitiv data, but there's some good news coming from German carmakers despite the coronavirus crisis.

Volkswagen expects to be profitable on a full-year basis even after the plunge in first-quarter earnings. Daimler sees the operating profit of its Mercedes-Benz Cars & Vans division to be above the prior-year level.

Shares in AMS are up 5.4% in premarket trade after the company said expectations on coronavirus impact on Q2 are limited.

Provisions against bad loans continue to affect bank results.

Barclays says 2020 target of above 9% Rote remains difficult, after posting a falling Q1 profit. Deutsche Bank swung to a loss in the first quarter. Standard Chartered PLC first-quarter profit tumbled 12%. Bankia first quarter net profit fell 54%. Nordea Bank reported a 16% fall in its first-quarter operating profit.

Airliners are in trouble.

Aerospace company Airbus called the coronavirus crisis the "gravest the aerospace industry has ever known", after posting a 49% slump in first-quarter adjusted operating profit.

British Airways-owner IAG reported a big loss and warned it may cut up to 12,000 jobs in sweeping restructuring measures aimed at weathering the crisis.

Lufthansa's Austrian unit AUA has applied for state aid of 767 million euro. The parent company is mulling over seeking some form of credit protection from creditors, while it is talking to the government about a 9 billion euros rescue package.

Spanish airport operator Aena said that traffic in its domestic network plummeted more than 95% in April, following a 59.3% fall in March.

Traffic down also on motorways. Atlantia cut its expected revenue by around 3 billion euros.

Covestro quarterly profit fell by 89%, hurt by weak demand in China.

Norsk Hydro reported a jump in first-quarter operating profit, but cautioned that the COVID-19 outbreak is hitting global demand for the metal.

Not all the food industry is strong. Carrefour saw revenue growth accelerating in the first quarter, reflecting strong food sales in March. Remy Cointreau warned it expected sales to fall by around 50-55% in the first quarter.

(Stefano Rebaudo)

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MORNING CALL: SENTIMENT STILL POSITIVE ON LOCKDOWN EASING (0537 GMT)

Futures are slightly higher as sentiment is still positive but European equities seem set to pause for a breather after a two-day rally fuelled by the prospect of lockdowns being gradually eased across the continent.

Expectations of massive stimulus from governments and central banks coupled with a better outlook about the pandemic are propping up the market.

Wall Street and Europe’s volatility indexes are comfortably below 40, as in March 2009, when the last bull market began, after the global financial crisis.

Crude futures jumped on expectations of a demand increase and after U.S. inventories grew less than expected in the week to April 24.

(Stefano Rebaudo)

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(Reporting by Thyagaraju Adinarayan, Joice Alves, Julien Ponthus in London and Stefano Rebaudo in Milan)