* Euro zone periphery govt bond yields: http://tmsnrt.rs/2ii2Bqr
* European stocks edge lower on mixed earnings
* Sterling softer ahead of key Brexit votes
* U.S., China sound upbeat on trade talks
* Trudeau's Liberals to form minority govt
By Tom Arnold
LONDON, Oct 22 (Reuters) - European shares edged lower on
Tuesday as talk of progress in China-U.S. trade talks was offset
by mixed corporate earnings, while sterling retreated ahead of
another vote on Brexit.
The broad European STOXX .STOXX slipped 0.3%, and MSCI's
world equity index, which tracks shares in 47 countries, was
flat at 0.02% lower.
French speciality minerals company Imerys IMTP.PA slipped
6% after cutting its outlook for 2019, and Norway's Aker BP
AKERBP.OL moved marginally lower as it slashed its full-year
oil output target. British household goods maker Reckitt Benckiser RB.L was
stranded at the base of the STOXX index with a 5% fall after it
cut its full-year sales forecast for the second time this year.
In Switzerland, drugmaker Novartis NOVN.S raised its 2019
target and reported better-than-expected revenue, while Apple
supplier AMS AMS.S climbed 6% as demand from smartphone makers
boosted operating profit. Shares of UBS UBSG.S led gains among banking stocks
.SX7P after Switzerland's biggest bank reported a smaller than
expected loss in quarterly profit. Swedish defence firm Saab SAABb.ST gained 7% to lead the
STOXX 600 after reporting third-quarter operating earnings well
ahead of market forecasts and affirming its view that operating
cashflow this year would improve versus 2018. "This week is an important week for earnings," said Andrew
Milligan, head of global strategy at Aberdeen Standard
Investments. "We've seen a lot of talk on Brexit and trade talks
and the new news is the earnings and the signal they give for
the future. We've broadly priced in that earnings will be
slightly positive for the year, but everyone is seeing how
monetary policy stabilises the situation."
E-Mini futures for the S&P 500 ESc1 slipped 0.14%.
TRADE TALKS, BREXIT VOTES
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS added a modest 0.4%, with a holiday in Tokyo
keeping turnover light.
China and the United States have achieved some progress in
their trade talks, Vice Foreign Minister Le Yucheng said on
Tuesday, adding that as long as both sides respected each other,
no problem could not be resolved. U.S. President Donald Trump sounded upbeat on a China deal
on Monday, while White House adviser Larry Kudlow said tariffs
on Chinese goods scheduled for December could be withdrawn if
talks go well. Meanwhile, euro zone government bonds dipped before votes in
Britain's parliament crucial to determining whether the country
can leave the EU in an orderly way at the end of the month.
Ten-year government bond yields across the euro zone were
down 1 basis point on the day DE10YT=RR , NL10YT=RR ,
FR10YT=RR . Germany's 10-year yield was at -0.35%, near
three-month highs. After he was forced by opponents into asking the EU for a
delay that he had promised he would never ask for, Prime
Minister Boris Johnson is battling to push legislation through
the House of Commons that will enact his last-minute Brexit
deal. Lawmakers vote around 1800 GMT on the 115-page Withdrawal
Agreement Bill and then vote on the government's extremely tight
timetable for approving the legislation. Sterling slipped 0.1% to $1.2947 GBP=D3 in early London
trading. It was flat against the euro, and was last trading
against the single currency at 0.86050 EURGBP=D3 . L3N2771JD
"If the House of Commons votes in favour of the deal,
GBP/USD could rally towards $1.3500 over the medium term. The UK
would then enter a transition period that lasts until 31
December 2020," said Kim Mundy, a currency strategist at CBA.
The Canadian dollar CAD= was little changed as the ruling
Liberal government of Justin Trudeau held onto power but with a
minority government after a closely fought election.
In commodity markets, spot gold inched 0.2% higher to
$1,487.20 per ounce XAU= . Oil prices edged lower as the market fretted about the
health of the global economy and the future for energy demand.
O/R Brent crude LCOc1 futures were down 10 cents at $58.86,
while U.S. crude CLc1 lost 12 cents to $53.19 a barrel.