MORNING BID EUROPE-Nessun Dorma Trump fired up ahead of Putin summit

* A look at the day ahead from EMEA Head of Desk Jon Boyle and EMEA Deputy Markets Editor Sujata Rao. The views expressed are their own.

LONDON, July 16 (Reuters) - It's as if the sun never goes down on Donald Trump's tweet account. From the land of the midnight sun, POTUS was blaming everyone but himself early on Monday for the parlous state of U.S.-Russia relations. He holds his first-ever summit with Russian counterpart Vladimir Putin in Helsinki later in the day, and it's anyone's guess what will actually come out of the meeting. Putin would clearly like a deal to restore full diplomatic staff levels after a round of mutual expulsions over the poisoning of a former Russian spy in Britain. After a tumultuous NATO summit last week in which they were roundly criticised by the U.S. president, America's European allies would see any move to weaken sanctions on Russian over its annexation of Ukraine as a further disavowal. The nuclear arms race and Syria could also feature on the largely unscripted agenda. With (Other OTC: WWTH - news) both sides studiously lowering expectations about concrete outcomes, maybe some sort or surprise is being prepared. Trump, after all, sees himself as the consummate deal-maker. Meanwhile, back in Brexit Britain, parliament will vote on the so-called customs bill, which has become the lightening rod for attacks by eurosceptics lawmakers in Prime Minister Theresa May's governing Conservative party. They want to harden Britain's stance in divorce negotiations with the European Union. Former Conservative minister Justine Greening has called for a new referendum on the final Brexit deal, to take the decision out of the hands of "deadlocked politicians".

MARKETS

World stocks closed last week with a second week of gains, led up by the SPX at five-month highs, but it’s a less auspicious start this morning. Data showed China’s second-quarter economic expansion was the slowest since 2016 and factory output faltered as the government’s crackdown on debt took effect. It’s early to see what effect the trade war might have on China, but clearly momentum is slowing and that could cast a pall world growth, one of the things that’s keeping the cycle going. With mainland shares down 0.8 percent, the effect filtered into Asian markets, including Australia, and Asian shares fell some 0.5 percent. But equities are still seeing some support from U.S. earnings growth, which is forecast at 20 percent-plus. European stocks have opened mostly flat, but Wall Street futures are in positive territory.

Data today include U.S. retail sales for June and euro zone trade. It is also a presidents’ day of sorts -- we have Trump meeting Putin in Helsinki, and Chinese President Xi Jinping hosting European Council President Donald Tusk and European Commission President Jean-Claude Juncker.

On the earnings front, the "N" of FAANGs, Netflix (Xetra: 552484 - news) , reports results. So do Bank of America (Swiss: BAC-USD.SW - news) (following banking peers Citi and Wells Fargo (Swiss: WFC-USD.SW - news) last week) and BlackRock (Sao Paolo: BLAK34.SA - news) , the world’s biggest asset manager. Netflix shares sank 4 percent on Friday on expectations that subscriber growth numbers may disappoint.

China’s yuan last week posted a fifth straight week of losses but has received some respite today as the dollar index eased to five-day lows. The euro has posted modest gains after China pledged the European Union would get improved market access . China- and trade-focused currencies such as the Aussie have also been lifted. The British pound suffered its worst week in two months and this morning it’s flat, before parliament starts to debate Theresa May’s Brexit plans this afternoon. Meanwhile, the yield curve on U.S. Treasuries remains stuck at the flattest in 11 years, with the spread between two-year and 10-year notes at 24.6 basis points. Oil has eased, with Brent standing around $75.

In European markets, the damage from China’s weaker data is putting further pressure on a market already bruised by the Sino (Dusseldorf: 1205802.DU - news) -U.S. trade war. Stocks have opened mixed, with Germany’s DAX flat, resisting losses despite being the most China-exposed of Europe’s equity indexes Investor (LSE: 0NC5.L - news) attention will begin to turn to Europe’s earnings season starting in earnest this week.

In company news, Indivior (Frankfurt: 2IVA.F - news) has jumped 25 percent after the drug company won a preliminary injunction against generic rival Dr Reddy’s Laboratories. Chipmaker Dialog Semiconductor is up 2 percent after it upped its margin expectations in results reported after the close on Friday.

Emerging markets stocks snapped a two-day winning streak to fall 0.4 percent. Chinese mainland stocks – already the two worst performing major EM indexes this year – fell some 0.9 percent. But currencies made some headway against a softer dollar, with South Africa’s rand clocking the biggest gains, strengthening 0.8 percent. Russia’s rouble and Turkey’s lira gained 0. 3 percent; the latter shrugged off Fitch's downgrade of Turkey on Friday deeper into junk territory, citing a widening current account deficit, a jump in inflation and the wider fallout from the plunging lira. China’s yuan reversed earlier losses to strengthen 0.1 percent. Pakistani’s rupee dropped sharply on Monday, in what appeared to be another devaluation by the central bank, which would be its fourth such intervention since early December.

Events/data/themes on Monday:

China Q2 GDP, June industrial output, retail sales and urban investment

E-China summit in Beijing

Indonesia June trade

Europe corp events: Alfa Laval (LSE: 0NNF.L - news) , Galp, Rio Tinto (Hanover: CRA1.HA - news) (sales)

EZ/Italy May trade

Netherlands DTC government bond auction

Czech May current account

Israel Q1 GDP, June inflation

US Q2 earnings: Bank of America, Netflix, Blackrock

US June retail sales, May inventories (Editing by Larry King)