LIVE MARKETS-Europe before the bell: the comeback continues

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EUROPE BEFORE THE BELL: THE COMEBACK CONTINUES

European equities look set to continue their recovery from last week's sell-off on Tuesday, on rising expectations that the Fed will cut interest rates next month in the face of a slowing economy.

Euro STOXX 50 futures STXEc1 are up 0.4% after the index gained 1.5% on Monday. It fell 3.5% last week, its biggest weekly drop since Trump announced his plan for import tariffs on goods from trading partners.

Other major bourses are also set to open firmly in the green.

Markets are now pricing in a more-than-90% chance the Fed will cut interest rates in September after Friday's jobs data, which showed a sharp deterioration in labour market conditions.

"A modest weakening of the economy would be good news as it should be more easing from the Fed," writes Jefferies economist Mohit Kumar.

"However, a sustained and sharp rise in unemployment rates would be a negative as it would raise concerns over growth and earnings."

Q2 earnings season is well underway and it's been another busy day in Europe, with reports from BP BP.L, Infineon IFXGn.DE, Diageo DGE.L, Hugo Boss BOSSn.DE and Continental CONG.DE.

(Samuel Indyk)

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