(Bloomberg) -- Good morning. Here’s what we are watching ahead of the market open in Europe:

A Calmer Session

After the bloodbath on Thursday, there are at least some signs that calm will return to European stocks for the end of the week. Most Asian stock markets are recovering and FTSE 100 and U.S. stock market futures are pointing higher. Oil stocks, one of the worst performers on Thursday, may recover some ground with oil snapping the losses of the past couple of days, but there is potential for a broad-based recovery, if not quite a rally. Gold miners, one of few sectors to rally yesterday after the precious metal appeared to get back some of its safe haven appeal, may slip with gold dipping back a touch.

U.S.-China Tensions

President Donald Trump suggested this week it was the Federal Reserve “going loco” on hiking interest rates that was causing the sell-off. But the trade dispute between the U.S. and China, plus little sign of any easing of relations, is underpinning the jittery mood. However, a closely watched report by the U.S. Treasury is said to find that China is not manipulating its currency, which could at least avert an escalation of the tensions. In combination with a calmer mood among traders, that could help some of the biggest victims of trade clashes, including autos, semiconductors and miners.

Don’t Forget Italy...

The massive sell-off in equities markets drew more attention than Italian government bond yields moving wider again on Thursday, following yet further intransigence from the country’s populist leaders toward EU opposition to its budget plans. Italy’s parliament approved its deficit goal on Thursday, meaning there is unlikely to be any let-up in tensions with the EU.

Or Turkey

Andrew Brunson, the U.S. pastor accused of being involved in an attempted coup against Turkish President Recep Tayyip Erdogan, is due to appear in court to answer the charges on Friday. The arrest of Brunson has been a major source of tension between Turkey and the U.S. and helped exacerbate the battering the Turkish lira has taken this year. The Trump administration is hopeful Turkey will set Brunson free on Friday, though no deal has yet been secured, according to people familiar with the situation. Brunson’s release might mean the sanctions imposed by the U.S. on Turkey are removed. That could have a significant impact and ease some of the pressure on the lira, potentially also providing a lift to European stocks exposed to the country.

Banks Begin

U.S. giants JPMorgan Chase and Citigroup will get the big bank reporting season underway, providing some early benchmarks to measure how FICC and equities trading activity held up during the third quarter. For Europe, this should start to form an idea of what updates due down the road from the likes of Deutsche Bank and Barclays will say about the state of investment banking. Wells Fargo is reporting too, but there is no direct read-across to European lenders.

To contact the reporter on this story: Sam Unsted in London at sunsted@bloomberg.net

To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Blaise Robinson, Tom Lavell

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