MORNING BID EUROPE-A fine bromance: Macron's new Iran deal for Trump

* 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, April 25 (Reuters) - President Emmanuel Macron's aides are hailing as a success the fact that Donald Trump accepted French proposals to work on a new, tougher deal to contain Iran. What he did not get from a state visit to Washington in which the two leaders' unlikely "bromance" was in full evidence was a clear commitment from Trump to stay in the existing 2015 nuclear deal in the meantime. This is high stakes diplomacy and the outcome is far from certain: the aim is to tackle Trump's concerns about the accord before a May 12 deadline for him to decide on restoring US sanctions on Tehran. Angela Merkel is also expected to push the case for building on the existing deal during her lower key visit to the White House on Friday but how other players - Russia, China and above all Iran - see this is unclear.

Investors may heave a sigh of relief - for now at least - over the latest developments in Italian politics. The 5-Star Movement said late yesterday it was slamming the door on fruitless discussions on forming a government with the far-right League, the eurosceptic coalition least favoured by financial markets and EU partners. Instead it is now looking to pursue talks with the outgoing centre-left Democratic Party (PD), targeting a link-up that also faces major obstacles. The next significant event will be this weekend's local election in the northeastern region of Friuli-Venezia-Giulia, where the League is pushing hard for a result showing it is a political force to be reckoned with; it may not be out of the running for national power just yet.

German Economy Minister Peter Altmaier presents this morning the government's updated growth forecast for this year and next. Reuters has learnt that it will lower the forecast to 2.3 percent in 2018 from a previous estimate of 2.4 percent. That's not a huge downgrade, but it reflects the growing sense that an upswing in Europe's largest economy is losing some momentum.

MARKETS AT 0655 GMT

Global equity markets eventually took fright on Tuesday on a combination of earnings season jitters and the 10-year U.S. Treasury yield popping above 3 percent for the first time since January 2014. Having ebbed and flowed for most of the day on a deluge of corporate and economic releases, Wall St eventually saw the glass half empty and the S&P500 closed down more than 1 percent and the Vix volatility gauge nudged back above 18 percent. Apart from the Treasury yield milestone - 10-year yields held above 3 percent first thing Wednesday but still shy of 2014’s peak of 3.041 percent – Caterpillar’s warning that its blowout first quarter earnings may be the “high watermark” of the year struck a chord in markets. With (Other OTC: WWTH - news) aggregate annual S&P500 profit growth for Q1 now tracking a seven-year high of 21 percent, that statement may be unsurprising but it speaks to ongoing anxiety about whether one of the longest running equity bull markets in history is topping out more broadly. The S&P500 slide brings it back into the red for the year to date. Tech sector nerves also persisted and the "glass half empty" market mood was underlined as the huge, above-forecast 73 percent rise in Google-parent Alphabet’s Q1 earnings was met with a 4.7 percent stock price drop on worries about rising costs. After a troubled couple of months on regulatory fears and data privacy concerns, Facebook (NasdaqGS: FB - news) earnings top the bill later. Concern about smartphone demand and chip sales hit Apple (NasdaqGS: AAPL - news) and its supply chain companies.

Major Asia bourses were down across the board overnight, with HK’s Hang Seng losing more than 1 percent. Edgy bond markets will continue to watch pumped-up oil prices, meantime, although Brent crude retreated overnight from 3-1/2 year highs above $75 and was last trading at $73.60. Currency markets were quieter, but the recent recovery of the dollar continued and the combination of that and the Treasury yield rise is unnerving emerging markets. Euro/dollar has been testing levels below $1.22 over the past two days and held just above that level this morning.

In European bond markets, the Italian/German 10-year yield spread narrowed further to its tightest in two years as Italy’s 5 Star party looked set to enter exploratory talks with the centre-left PD on forming a government.

Elsewhere, eyes were on Turkey as its central bank meets. Investors are expecting a late liquidity window rate hike of 50 basis points to 13.25 percent, according to a Reuters poll. Investors are betting that a snap election on June 24 will give the central bank leeway to tighten sooner rather than later. The lira firmed 0.4 percent in early trading.

It’s a busy day for European corporate results, especially for banks. Credit Suisse (IOB: 0QP5.IL - news) ’s revamp seems to be paying off as the Swiss bank beat Q1 profit expectations and premarket indications see the shares around 2-3 percent higher, though Britain’s Lloyds Bank is still grappling with fallout from PPI mis-selling and has slightly missed analyst expectations. Elsewhere Gucci’s popularity shows no signs of waning as owner Kering (LSE: 0IIH.L - news) beats forecasts – its shares are seen around 5-7 percent higher.

* Europe corp events: STMicro, Credit Suisse, Lloyds, GSK, Kone (LSE: 0II2.L - news) , Statoil (LSE: 0M2Z.L - news) , Persimmon (Frankfurt: 882058 - news) , Linde (IOB: 0H3X.IL - news) , Norsk Hydro (LSE: NHY.L - news) , Kvaerner, Storebrand; CRH trading, Intu Properties (LSE: INTU.L - news) trading; Berlin Air Show

* France April consumer confidence

* Irish central bank chief and ECB policymaker Lane speaks in Paris

* Turkey central bank policy decision

* UK Brexit minister Davis and UK finance minister Hammond faces questions in parliament at separate hearings

* Poland March jobless

* Israel March trade

* US Q1 earnings: Facebook, Boeing (NYSE: BA - news) , eBay, Qualcomm (Swiss: QCOM-USD.SW - news) , AT&T (Sao Paolo: ATTB34.SA - news) , Visa (Xetra: A0NC7B - news) , PayPal (TLO: PYPL-U.TI - news) , Boston Scientific, Viacom (Frankfurt: A0HM1Q - news) , T.Rowe Price, General Dynamics, Goodyear, Ingersoll-Rand, Nasdaq (Frankfurt: 813516 - news)

* US Treasury auctions 5-year notes, 2-year FRNs

(Editing by Andrew Heavens)