MORNING BID EUROPE-U.S. jobs, Trump's Russia probe in focus

(A look at the day ahead from EMEA markets specialist editor Nigel Stephenson. The views expressed are his own.)

LONDON, Aug 4 (Reuters) - Friday’s focus is on events in the United States, with the probe into possible Russian interference in the U.S. presidential election weighing on markets somewhat and the latest, always keenly watched, jobs reports due later.

The dollar is still on the defensive, close to 2-1/2-year lows against the euro and seven-week lows versus the yen. The political uncertainty emanating from the White House, along with mediocre U.S. data, have taken a toll on the greenback. If the monthly payrolls report shows the forecast 183,000 jobs, or more, were created, that could help the dollar.

Also bubbling in Washington is the possibility of a major trade row with China as President Donald Trump prepares to launch an inquiry into Beijing’s intellectual property and trade practices. An expected White House announcement on the matter on Friday has been postponed.

As Europe starts trading, the euro is up 0.1 percent at $1.1879, the yen down 0.1 percent at 110.10 to the dollar and sterling is flat at $1.3140 after Bank of England policymaker said the UK was “a little bit” better placed to cope with an interest rate hike.

European shares are expected to open slightly lower today with earning updates likely to be the main focus. Equity index futures were trading down 0.2-0.3 percent while the STOXX looks set to end the week flat following two week of declines.

The earning season in Europe is well past its mid-point with nearly two thirds of companies in the MSCI Europe index having already reported results. Of them, 61 percent have either beaten or met expectations. All in all second-quarter earnings growth is expected at more than 22 percent.

Insurers are in the spotlight with Swiss Re (LSE: 0QL6.L - news) shares likely to be hit after the world's second-largest reinsurer posted a bigger-than-expected 35 percent drop in first-half net profit. However, Germany's Allianz (Swiss: ALV-EUR.SW - news) was indicated up 0.5 percent following final second-quarter results.

Elsewhere among financials, domestically focused British bank Royal Bank of Scotland (LSE: RBS.L - news) swung to a first-half profit as its recovery continued.

Mediobanca (Milan: MB.MI - news) raised its dividend and beat profit expectations, in another sign of a healthier Italian banking sector following strong results from the country's largest bank UniCredit (EUREX: DE000A163206.EX - news) in the previous session. Still in Italy, Telecom Italia (Amsterdam: TI6.AS - news) could grab attention after Economy Minister Padoan said there would be clear advantages to spinning off the former state-owned phone group's fixed-line network.

Among other stocks that could move traders mentioned Germany's GEA Group (IOB: 0MPJ.IL - news) which is seen jumping on news that activist investor Albert Frere has built a stake in the company.

Other stock movers: Germany to weigh Commerzbank (Xetra: CBK100 - news) stake sale post-election - WirtschaftsWoche; Pearson cuts interim payout by 72 percent; Strong demand in London, New York boosts hotelier M&C's profit; Madame Tussauds-owner Merlin cautious on outlook due to recent attacks; Erste Groups's net profit falls slightly less than expected; SocGen (Paris: FR0000130809 - news) 's car-leasing arm ALD posts higher H1 profit; Italy's BPER to book 1 billion euros in writedowns to ease bad loan sales; Carige ups cash call size to 560 million euros after 114 million euro Q2 loss.

Asian shares, measured by MSCI (Frankfurt: 3HM.F - news) , gained 0.2 percent while Tokyo shares closed down 0.4 percent, pressured by the stronger yen.

Oil is down 11 cents a barrel at $51.90 on rising U.S. and OPEC output. Copper is holding near two-year highs on demand from China. Gold is holding near seven-week highs touched earlier this week.

Emerging market stocks rebound 0.3 percent and are on track for a fourth straight week of gains, with Asian tech shares mostly shrugging off Wall street’s tech shares selloff though Korean shares, were set for a second lossmaking week, led by Samsung, the biggest stock in the MSCI EM index.

Chinese mainland shares fall with Shenzen down 0.4 percent, as expectation grows that the US will launch a probe into Chinese IP and trade practices. The yuan is set for its fourth week of gains against the dollar, paying little attention to speculation that authorities are set to widen the currency’s trading band.

Russian shares (yet to open) are at 2-1/2 month highs, possibly benefiting from the latest bout of rouble weakness which was caused by sanctions.

The Czech crown is trading just off the new 3-1/2 year highs hit against the euro after the previous day’s rate rise. Sovereign dollar bond yields at at 182 bps over Treasuries, a one-month high. Romanian leu is flat before a central bank meeting that should leave rates unchanged at 1.75 percent

* Europe corp events: Siemens (BSE: SIEMENS.BO - news) , Fugro (LSE: 0LNT.L - news) , Nokia (Milan: 23568.MI - news) , adidas, Inmarsat (Other OTC: IMASF - news) , Ladbrokes (Amsterdam: LB6.AS - news) , Allianz, Hugo Boss (IOB: 0Q8F.IL - news) , Novo Nordisk (LSE: 0QIU.L - news) , RBS

* Germany June industrial orders

* Italy June retail sales

* Romania central bank policy decision

* Rwanda presidential election

* U.S. Q2 earnings: Aon (NYSE: AON - news) , CBOE, Cigna

* U.S. July payrolls report, June trade

* Canada July employment report, June trade

* Moody’s reviews sovereign credit rating of Sweden; S&P reviews Albania, Kuwait, Mozambique; Fitch reviews Sweden, Slovakia, Macedonia, Azerbaijan (Editing by Alison Williams)