LIVE MARKETS-Before the bell: Europe calmer, but fragile

By Reuters News

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BEFORE THE BELL: EUROPE CALMER, BUT FRAGILE

The mood in European markets is much calmer on Friday morning than it was at the previous close, with stock futures pointing to small gains, and bond yields down, reflecting the late rally in Treasuries.

Euro STOXX 50 futures are up 0.2%, with most European markets set to post opening gains, albeit only just in the case of France.

European markets were roiled on Thursday by a global bond selloff combined with worries about the French deficit, which sent French bond yields, and those of more indebted nations like Italy, soaring.

Investors also dumped stocks, the CAC40 lost 1.6% and the STOXX 600 1.3%. .FCHI, .STOXX

But investors are still on edge, and while bond yields are down across the board we've still got a rush to safety going on — the 10-year German yield is down 8 basis points while the 10-year French yield is flat.

That doesn't feel like an environment that is great news for stocks.

Bank stocks took a pounding, especially in Britain where budget worries were also in the mix, so they'll be in focus again at the open.

Also top of mind is BAE Systems, BAES.L which Reuters reported is among the potential bidders that are in the early stages of exploring an offer for Robin Radar Systems.

Adidas ADSGn.DE and Puma PUMG.DE could struggle with Nike NKE.N shares down sharply in after-market trading after its results showed sales in China plummeted.

(Alun John)

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EARLIER LIVE MARKETS POSTS:

MORNING BID: CAN TREASURIES RALLY FOR A SECOND DAY? CLICK HERE

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