* A look at the day ahead from European Economics and Politics Editor Mark John and EMEA markets editor Mike Dolan. The views expressed are their own.
LONDON, Oct 31 (Reuters) - After a UK budget this week which the Confederation of British Industry said contained "more treats than tricks for business", PM Theresa May will follow up today by meeting around 120 chief executives and international investors to discuss Brexit and the economy. After initially being perceived as frosty towards business, May has sought to win its backing for her compromise plan to avoid a no-deal Brexit as she takes on critics in her own party. Separately, foreign secretary Jeremy Hunt is due to outline a vision of Britain's diplomatic role in the post-Brexit world in a speech tonight.
There is lots to talk about a rare meeting of the so-called NATO-Russia Council at alliance headquarters in Brussels today. The implication of Donald Trump's move to pull the U.S. out of the 1987 INF missiles treaty will loom large, as will NATO's launch last week of its biggest military exercise since the Cold War, a 31-country event stretching from the Baltic Sea to Iceland - and which came after Russia held a huge military drill last month. The ambassador-level talks rarely result in immediate headlines, but with other forums for Russia-West cooperation not active, they can make a difference.
German retail sales surprisingly fell 2.6 percent year-on- year last month, data showed this morning, confounding expectations of a modest rise. Such an outcome, coming after yesterday's weak eurozone growth number, will no doubt fuel the growing debate about whether the European Central Bank can keep its stimulus taper on track for the end of this year - despite Mario Draghi's best efforts to play down such speculation at his press conference last week.
MARKETS AT 0755 GMT After the worst month for world stock markets in seven years, there appears to be some respite on the final day of "Red October". Aided by news of a rise in U.S. consumer confidence to its highest level in 18 years and a rebound in micro-chip and transport stocks, Wall Street indices finally sustained a rally for a full session and ended more than 1 percent higher. Despite the bounce, the S&P500 is still on course for its worst month since May 2010 with October losses clocking in close to 8 percent. For the wider MSCI all-country equity benchmark, Wednesday has seen a gain of 0.3 percent, but an 8.5 percent loss this month is its worst showing since May 2012. The 9.5 percent loss for the emerging-market equivalent is the worst in six years. However, the fillip on Wall Street has rippled around the world and Asia bourses have followed suit today with gains of more than 1 percent. Even Shanghai stocks pushed higher despite October business survey readings indicating the slowest pace of factory growth in more than two years as the trade war with Washington hit export orders. The offshore yuan briefly reached its weakest since January last year. Tokyo's Nikkei has outperformed by adding more than 2 percent, helped by a broad rally in the DXY dollar index to a 16-month high, which pushed the yen to its weakest in three weeks and the euro to within a whisker of its lowest since mid-August. The Bank of Japan left its policy settings unchanged on Wednesday, cutting inflation forecasts in the process.
Sterling was a particular soft spot before tomorrow's Bank of England policy decision and amid mounting concern over Brexit. As S&P Global credit rating firm warned it may cut the UK's sovereign credit rating in the event of a recession-inducing no-deal Brexit, the pound fell on Tuesday to its lowest since mid-August against the dollar and its lowest in a month against the euro. European stocks are expected to sustain the global equity market rebound and add about 1 percent at the open. Both the pan-European and euro zone stock indices were set for their weakest month since August 2015. After disappointing euro zone third-quarter GDP reports on Tuesday, flash inflation readings for the area later today will be watched closely after some signs of an acceleration in German price rises during the month.
European earnings are still in full flow, with companies sounding more positive overall. L'Oreal, for example, said its sales bounced thanks to strong Asian demand. That bucked the trend of results so far warning of slower Chinese growth, and the cosmetics giant's shares were expected to rise 3 percent. Banks Santander and Standard Chartered reported better results, which could help boost sentiment in the battered banking sector. * Europe corp events: Air France, Airbus, ASM, Santander, BBL, Clariant, DSM, GlaxoSmithKline, Imerys, Next trading, OMV, Repsol, Rexel, Sanofi, Smurfit Kappa trading, Standard Chartered, Telefonica, Telenet, Tenaris, Wolters Kluwer trading, Dialog Semiconductor Q3
* EZ, France, Italy Oct flash inflation
* Germany Sept retail sales
* Spain, Austria Q3 GDP
* EZ Sept jobless
* Swiss National Bank chief Jordan speaks in Bern
* Bank of Spain chief and ECB policymaker Hernandez de Cos speaks in parliament in Madrid
* Turkey central bank releases quarterly inflation report, policy meeting minutes
* Turkey Oct confidence, Sept trade balance
* Riksbank chief Ingves speaks in Lisbon; Sweden government bond auction
* Norges Bank chief Olsen speaks in Oslo
* US Q3 earnings: Anthem, ADP, Bunge, Diebold Nixdorf, Estee Lauder, General Motors, Groupon, HollyFrontier, Intercontinental Exchange, Kellogg, Molson Coors, Momenta Pharmaceuticals, Sprint, Tesla, Tribune Publishing, Yum! Brands. (after-mkt): AIG, Antero
* US Oct ADP private sector jobs report, Q3 employment costs; Oct Chicago PMI
* Brazil central bank policy decision (Editing by Larry King)
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