GLOBAL MARKETS-World stocks mark time ahead of U.S. data, earnings

* European shares struggle for direction
* U.S. futures indicate flat
* German ZEW, U.S. retail sales in focus
* Citigroup interest margin decline highlights headwinds for
banks

By Karin Strohecker
LONDON, July 16 (Reuters) - Global stocks struggled to cling
to recent gains on Tuesday and the dollar lingered with markets
awaiting U.S. data and a slew of corporate and bank earnings for
a fresh readout on the health of the world's largest economy.
European markets struggled for direction with the pan-region
Stoxx 600 STOXX nudging a touch lower, reflecting key indexes
in Germany .GDAXI and France .CAC treading water.
The underlying picture was more mixed, with healthy gains in
airline and healthcare stocks offsetting losses in telecoms and
automotives amid uncertainty as the earnings seasons kicks off.
.EU LIVE/
Asian markets had fared slightly better. MSCI's Asia-Pacific
ex-Japan index .MIAPJ0000PUS gained 0.3% as gains in South
Korea .KS11 and Taiwan .TWII offset losses in China's
blue-chip CSI300 index .CSI300 , still smarting from Monday's
tepid growth data. It showed the toll the Sino-U.S. trade war is
taking, even as new data highlighted Beijing's efforts to boost
spending. .SS
But much of the focus was already shifting to the United
States, where futures .ESc1 .NQc1 pointed to a flat opening.
The U.S. earnings season is kicking off with heavyweights
JPMorgan, Goldman Sachs and Wells Fargo all due to report.
Markets also await retail sales data - expected to show a
0.1% rise in June. This comes ahead of major central bank
decisions, with the ECB due on July 25 while the U.S. Federal
Reserve is expected to deliver a rate cut shortly thereafter.
"The market is waiting for what the ECB will do, followed by
what the Fed will do and in the meantime there is still this
undercurrent of waiting for some of the earnings season results
to come out," said Gerry Fowler, investment director at Aberdeen
Standard Investments.
"The 2019 earnings season will be roughly zero growth ...
unless we see broader economic growth recovery, we may not see
material earnings growth again for quite some time."
Citigroup's C.N results on Monday had provided markets
with a first taster: a decline in net interest margin in its
mixed quarterly report underlined risks for financial firms in a
lower interest rate environment. That decline partly
overshadowed better-than-expected profit numbers, triggering a
fall in shares of other banks on concerns that it would presage
lower profits across the industry. fallout from trade tensions has also cast a cloud over
the upcoming earnings season. Overnight, U.S. President Donald
Trump showed no signs of softening his stance on China, warning
that Washington could pile on more pressure as trade talks
sputtered along. Though this has also reinforced expectations of policy
easing by major central banks. Signs of trade tensions weighing
on corporate profits and the fading impact of tax cuts would
underscore the Fed's concerns over slowing investment, said Ryan
Felsman, senior economist at CommSec in Sydney.
"That feeds into the narrative of concerns around the global
economy, the slowing in the U.S. economy, but also the need for
potentially more aggressive rate cuts from the Fed to support
the U.S. economy going forward," Felsman said.
Markets have fully priced in a 25-basis point cut by the Fed
at its meeting at the end of this month.
In fixed income markets, the yield on benchmark 10-year
Treasury notes US10YT=RR turned higher to 2.0973% while the
two-year yield US2YT=RR , closely watched as a gauge of
traders' expectations for Fed fund rates, rose to 1.8416%.
Yields on benchmark 10-year German debt DE10YT=RR were
steady at minus 0.2930% after falling nearly five basis points
overnight, its biggest drop in a month. GVD/EUR
A survey from Germany's ZEW institute later on Tuesday is
expected to show the mood among investors in the bloc's largest
economy worsened in July after a plunge in June.
Also on the agenda is a vote to name Germany's Ursula von
der Leyen president of the European Commission. She could become
the commission's first female president, but her candidacy is
being opposed by European Union socialist and liberal lawmakers.
In the currency market, the dollar was up 0.1% against the
yen at 108.01 JPY= while the euro EUR= bought $1.1244.
The dollar index .DXY , which tracks the greenback against
a basket of six major rivals, was a touch stronger at 97.063.
Sterling was back on the ropes, falling below $1.25 as
Brexit and economic concerns weighed ahead of British labour
market data for the month of June, due at 0930 GMT.
Oil prices steadied after earlier easing on signs that the
impact of a tropical storm on U.S. Gulf Coast production would
be short-lived. O/R
Global benchmark Brent crude LCOc1 was flat at $66.45 per
barrel and U.S. West Texas Intermediate (WTI) crude CLc1 at
$59.56 per barrel.
Trade in gold echoed the cautious tone of equity markets
ahead of U.S. data. The precious metal was last down 0.03% on
the spot market XAU= at $1,413.20 per ounce. GOL/

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