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MORNING BID EUROPE-From Berlin to Brussels: von der Leyen's vote test

* A look at the day ahead from European Economics and Politics Editor Mark John and EMEA markets editor Mike Dolan. The views expressed are their own.

LONDON, July 16 (Reuters) - Germany's Ursula von der Leyen will learn from a European Parliament vote this evening whether she will become the first woman to head the European Commission, the executive body that shapes EU policy on everything from trade to eurozone fiscal matters. The conservative is struggling to persuade enough left-leaning and liberal lawmakers to back her - although a series of last-minute policy promises yesterday on things like an EU-wide minimum wage and a more growth-oriented budget policy may just be enough to win them over. Beset by challenges ranging from Brexit to trade, the last thing the EU wants is a rejection of von der Leyen that would force it back to more horsetrading on the bloc's top jobs. Yet even if she only scrapes through - say, with the votes of departing British MEPs or Polish nationalists - that would raise questions about her authority.

The dynamic of the UK Conservative Party leadership campaign was always going to force an escalation of Brexit rhetoric - and sure enough last night's closing debate saw both candidates harden their language on any future deal with the EU. Boris Johnson and Jeremy Hunt declared the backstop mechanism for the Irish border in the current withdrawal dead: that implies that any deal would need the type of re-negotiation that the EU side has ruled out for months and which few European capitals have any appetite for. No wonder that fears of no-deal Brexit are rising, not least in countries such as Ireland whose economies stand to take a big hit from such an outcome.

This month 75 years ago, as World War Two drew to a close, the West's financial chiefs gathered in Bretton Woods, New Hampshire to work out a more predictable way of managing the globe's economy. What emerged were institutions including the International Monetary Fund, the World Bank and the World Trade Organisation that have helped steer trade, aid and finance ever since. Although critics can point to trade inequalities and a system that can impose inappropriate solutions on the world's poorest nations, the founding principle was a drive for economic openness that is now under unprecedented onslaught from Donald Trump's "America First" protectionism. As trade tensions continue to rise, that will be the backdrop to an anniversary conference hosted by G7 president France in Paris today where US Fed chief Jerome Powell and other policy-makers will speak.


MARKETS AT 0655 GMT

As the second-quarter corporate earnings season starts to take over as a dominant issue, world stock markets stalled on Tuesday as the latest updates are due to hit alongside critical readings of U.S. retail and industrial output for June. Although Citigroup’s Q2 results appeared to beat all headline expectations on Monday, the market was unnerved by a drop in its sector-beating net interest margins – prompting some to fear for the impact on U.S. banks of renewed Fed easing and the inversion of parts of the U.S. yield curve over the past few months. While Citigroup's stock itself ended only modestly in the red, the interest margins concern was enough to knock 1% off the banking sector as a whole and dragged on otherwise buoyant Wall St indices clocking fresh record highs. As a result, Q2 earnings from JPMorgan, Goldman Sachs and Well Fargo later on Tuesday will be an important reality check. On the economic front, there has been little market follow-through on the surprisingly upbeat Chinese industrial and retail numbers for June and also a forecast-beating jump in the New York Empire State business survey for July. Assuming U.S. data confirms all that later today, the global economic picture for mid-year will have brightened considerably – questioning just how much easing the Fed needs to embark on after this month. Futures markets are still comfortably priced for a quarter point Fed cut the week after next, with a 1-in-4 chance of a 50 basis points move. Ten-year U.S. Treasury yields slipped back below 2.1% overnight, with the yield curve between 3 moths and 10 years inverting again to the tune of 8bp after flirting with positive territory over recent sessions. Concerns over another looming row over the U.S. Federal debt ceiling eased somewhat after Treasury Secretary Mnuchin said a deal with Congress on the issue was close.

Asia’s bourses were mixed earlier, with lingering trade war fears stoked by another round of bellicose comments on the issue from U.S. President Trump, who said slowing economic growth in China to a 27-year low was evidence that U.S. tariffs were having "a major effect" and warned that Washington could pile on more pressure. Japan’s Nikkei, back from Monday’s holiday, dropped 0.7%. Shanghai was a shade lower, with HK and Seoul in the black. U.S. stock futures pointed north, while Europe was braced for minor losses at the open. In currency markets, the dollar’s DXY index was firmer and euro/dollar was probing $1.1250 on the downside first thing. Sterling was also under the cosh early Tuesday, slipping below $1.25 as traders awaited June UK jobless numbers and eyed the final rounds of the contest on the next UK PM that’s likely to be won by hard Brexit advocate Boris Johnson. Australia’s dollar retreated from recent highs after Reserve Bank of Australia policy meeting minutes indicated it as ready to cut interest rates. Bitcoin continued to push lower after a weekend drubbing related to U.S. moves against cryptocurrencies and warnings about Facebook’s plans for a ‘stablecoin’ Libra. Facebook Inc said on Monday it would not proceed with the launch of its Libra cryptocurrency until regulatory concerns are addressed, as U.S. Treasury secretary Mnuchin took the unusual step on of saying he had serious concerns it could be used for illicit activity.

On the corporate news front, shares in Burberry are seen 2%-4% higher after Q1 sales at the British luxury brand topped expectations and one trader said it was a "big beat". Luxury names in Europe could get a boost after Burberry said it saw mid-teen percentage growth in mainland China. Bayer shares are making decent gains (+2.5%) pre-market after a U.S. federal judge slashed a jury award in a Roundup weed killer trial. Ryanair shares are seen 1-2% lower after it cut its forecast for growth in traveller numbers next summer to 3% from a previous 7% as the largest budget carrier in Europe continues to grapple with further delays in deliveries of Boeing 737 MAX planes. After a 10% sell-off yesterday, Sports Direct shares could see some more action after an activist hedge fund revealed a stake in the company. Sports Direct delayed publication of its annual results. * Europe corp events: Telenor, Yara, Hays trading, Burberry trading, Experian trading, Schibsted

* Italy May trade balance, June inflation

* UK June jobless, May earnings

* Banque de France chief and European Central Bank policymaker Villeroy speaks in Paris at Bretton Woods 75th anniversary event

* EU trade commissioner Malmstrom and World Bank chief Malpass speak in Paris at Bretton Woods 75th anniversary event

* UK auctions 2037 gilts

* Germany July ZEW investor confidence index

* EZ May trade balance

* NATO's Supreme Allied Commander Europe, U.S. General Wolters, visits Sarajevo

* US earnings: JPMorgan, Goldman, Sachs, Wells Fargo, Kinder Morgan, CSX, Johnson & Johnson, Prologis

* US June retail sales, industrial production, July NAHB housing market index, May TIC data

* Argentina June inflation

* Dallas Fed chief Kaplan speaks in DC; Chicago Fed chief Evans speaks in Chicago, Atlanta Fed chief Bostic speaks in Atlanta (Editing by Andrew Heavens)