RPT-GLOBAL MARKETS-Stocks stage tentative rebound after ECB disappointment

(Repeats to widen distribution)
* Vodafone , Vivendi boost European stocks
* Q2 U.S. economic growth data expected
* Bond yields up from lows after ECB holds off rate cuts
* ECB widely seen easing policy in Sept
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tom Arnold
LONDON, July 26 (Reuters) - European stocks staged a
tentative recovery on Friday as a rally in media stocks and
solid earnings at several U.S. companies helped investors
overcome the disappointment of the European Central Bank's
failure to deliver immediate policy easing.
A day after its worst session in three weeks, the
pan-European stock benchmark index .STOXX added 0.4%.
London's FTSE 100 .FTSE also revived, helped by Vodafone's
VOD.L plans to create a separate European tower company and
education firm Pearson's PSON.L gains from an upbeat trading
update. Decent U.S. earnings overnight from Google's owner Alphabet
GOOGL.O , Intel INTC.O and Starbucks SBUX.O helped offset
worries from weaker Amazon AMZN.O numbers. U.S. stock futures ESc1 rose 0.3%, pointing to a
turnaround after Wall Street shares fell from record highs on
Thursday.
"A stream of earnings from the United States has shown
people have to pay attention to the corporate cycle as well as
the interest rate cycle, and focus is also shifting to the
U.S.'s latest GDP numbers this afternoon, which may go some way
to influencing what the Federal Reserve decides to do," said
Andrew Milligan, head of global strategy at Aberdeen Standard
Investments.
ECB President Mario Draghi on Thursday all but pledged to
ease policy further and even hinted at a reinterpretation of the
ECB's inflation target. But many investors had hoped for an
immediate reduction of interest rates. Helping to offset the disappointment, shares of Vivendi
VIV.PA rose 5.7% after stellar first-half results at its
Universal Music Group raised the stakes for the sale of the
French media giant's most-prized asset. That helped Europe's media sector .SXMP advance 1.6%.
Vodafone jumped 9.8% on plans to move its mobile mast operations
in 10 European markets into a new company that it potentially
could list. SHADOWS
In Asia, uncertainties over whether Washington and Beijing
will be able to settle gaping differences over trade, technology
and even geopolitical ambitions, kept many investors on guard.
Negotiators from the two countries will meet in Shanghai next
week. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS dropped 0.6%.
A rally in global bonds ran out of steam after Draghi
cautioned about pulling the trigger too quickly on policy
easing.
Still, the euro's overnight index swaps EUROIS are pricing
in a rate cut of more than 10 basis points in September, to
minus 0.50 percent.
"An interest rate cut of 10 basis points in September looks
like a done deal now," said Hideki Kishida, fixed income
strategist at Nomura Securities.
Euro zone government bond yields began to reverse some of
the rises seen after the ECB meeting.
German 10-year bond yields were around one basis points
lower at -0.373%, heading back down towards the record low of
-0.422%, recorded on Thursday. Other 10-year yields in the euro
zone were also around two basis points lower FR10YT=RR
AT10YT=RR , IT10YT=RR Investors expect the Federal Reserve to cut interest rates
by 0.25 percentage point at its policy meeting ending on July 31
to protect the economy from potential damage from the U.S.-China
trade war.
An advance reading of U.S. gross domestic product, due at
8:30 a.m (1230 GMT), is expected to show the economy grew 1.8%
in April-June, the slowest growth in more than two years.
The dollar .DXY held near two-month highs and is set for
its second consecutive weekly rise as investors waited for the
GDP numbers. The euro EUR=EBS traded at $1.1136, a mild recovery from a
two-month low of $1.1102 hit after the ECB decision on Thursday
but down 0.1% on the day. For the week, the single currency is
down 0.7%.
Sterling GBP=D3 edged down to $1.2428, and was on course
for a 0.6% weekly loss. Cable has stabilised since Boris Johnson
became Britain's new prime minister, but uncertainty remains
about Britain's negotiations to leave the European Union.