*

Euro resumes decline after Monday's retreat

*

Wall St futures edge up before Fed, mega cap earnings

*

Analysts warn tariffs are drag on EU and US economies

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Oil flat after Trump shortens Russia deadline

(Recasts ahead of Wall Street open, updates prices throughout)

By Nell Mackenzie

LONDON, July 29 (Reuters) - Wall Street futures pointed

to a buoyant open on Tuesday ahead of earnings reports from a

number of companies and the Federal Reserve's policy meeting

that starts later in the day.

S&P 500 futures ticked up 0.3%, while Nasdaq futures

added 0.5%, riding on hopes for upbeat results from mega

caps this week that include Apple ( AAPL ), Meta Platforms ( META )

, Microsoft ( MSFT ) and Amazon ( AMZN ).

The dollar index climbed 0.4% to 98.951 after the

rush out of short dollar positions lifted it 1% overnight, while

it eased a one-week high on the yen to stand at 148.69

.

Yields on 10-year Treasuries inched up 3 basis

points to 4.392%, having crept higher on Monday as markets

braced for another steady decision on interest rates from the

Federal Reserve.

Futures imply a 97% chance the Fed would keep rates at

4.25%-4.5% at its meeting on Wednesday and reiterate concerns

that tariffs will push inflation higher in the short term.

Analysts also assume one, or maybe two, Fed officials will

dissent in favour of a cut and supporting wagers for a move in

September.

The odds could change depending on a slew of U.S. data this

week including gross domestic product for the second quarter,

where growth is expected to rebound to an annualised 2.4%, after

a 0.5% contraction in the first quarter.

Figures on job openings are due later on Tuesday that will

help refine forecasts for the crucial payrolls report on Friday.

"The equity rally has narrowed, valuations are stretched and

market internals are flashing caution, and consumer data

-particularly around housing and retail - show signs of

fatigue," said Bruno Schneller, managing director at Erlen

Capital Management, Zurich.

"This is the start of a 'show-me' phase - for both

policymakers and corporates. Markets will demand confirmation:

from earnings, from macro, and from the Fed," Erlen added.

Canada's central bank also convenes on Wednesday and again

is widely expected to hold rates at 2.75%.

TARIFF ECHOES

U.S. equity moves follow record closing highs for the S&P

and the Nasdaq on Monday in volatile trading after the U.S.

struck a trade agreement with the European Union, while the Dow

remained just about 200 points short of an all-time high.

The U.S.-EU trade deal, announced on Sunday, halved

threatened 30% U.S. tariffs on EU imports to 15% and bolstered

expectations that more such agreements will follow ahead of

President Donald Trump's looming August 1 deadline.

Trump also flagged a "world tariff" rate of 15%-20% on all

trading partners that were not negotiating a deal, among the

highest rates since the Great Depression of the 1930s.

"While the worst-case scenario was averted, the implied EU

tariff increase from 1% in January is a significant tax increase

on EU exports," wrote economists from JPMorgan in a note.

"This is a very big shock that unwinds a century of U.S.

leadership in global free trade," they said. "While we no longer

see a U.S. recession as our baseline from this shock, the risk

is still elevated at 40%."

The euro fell 0.4% to $1.1543, after retreating

1.3% overnight in its largest drop since mid-May.

European shares recovered after Monday's sell-off. Europe's

broad STOXX 600 was up 0.6%, helped by some positive

reactions to quarterly earnings. French and German

stock indexes rose over 1%.

Novo Nordisk, one of Europe's biggest companies by market

cap, named Maziar Mike Doustdar as its new chief executive after

the abrupt removal of its previous CEO in May. Shares in the

company were down as much as 29.8% by 1149 GMT, wiping off over

80 billion euros in market cap at one point.

An air of caution saw MSCI's broadest index of world shares

tick down about 0.2% after China stocks ended

higher on Tuesday as a new round of Sino-U.S. trade talks

continued, while Japan's Nikkei lost 0.8%.

A further risk to world growth came from a sudden spike in

oil prices after Trump threatened a new deadline of 10 or 12

days for Russia to make progress toward ending the war in

Ukraine or face tougher sanctions on oil exports.

In commodity markets, prices for copper and iron ore were

under pressure while gold was roughly flat at $3,316 an ounce

.

Brent was about 20 cents higher at $70.22 a barrel,

while U.S. crude up 17 cents to $66.90.

(Editing by Sam Holmes, Bernadette Baum and Mark Heinrich)