Oct 28 (Reuters) - A look at the day ahead in European

and global markets from Wayne Cole.

U.S. President Donald Trump is touring Tokyo today, and all

the talk is of baseball, golf gifts and Nobel Peace Prizes,

along with the odd deal on rare earths.

The bonhomie is at least a relief from the usual trade war

invective and keeps alive hopes for some sort of rapprochement

with China later in the week.

It's allowed Asian markets to consolidate most of the

outsized gains made on Monday, with indexes in Japan, Taiwan and

South Korea all near record highs. The latter got an added bump

from data showing the economy outpaced forecasts in the third

quarter, led by strength in consumption and exports.

China's Shanghai index also pushed past 4,000 for

the first time since 2015 as Beijing signed an upgraded

free-trade deal with Southeast Asian bloc ASEAN.

European and Wall Street futures are mostly flat, no

surprise given the who's who of mega-caps reporting this week

have a lot to live up to.

Expectations are high given that of the 30% of S&P 500

companies reporting so far, 85% have topped the Street on EPS.

Options imply share price swings of 6% in either direction are

possible depending on the results.

Likewise, bonds and the dollar are waiting anxiously to see

just how dovish the Federal Reserve might be on Wednesday. A cut

of 25 basis points is baked in, and investors are looking for

validation of bets for another in December, and two more next

year.

The long-end would also very much like for the Fed to stop

running down its balance sheet, please. No more QT for thee.

For the Bank of Japan, betting is very much for no move on

Thursday, though there is a risk that two or more members vote

for a rate hike given stubborn inflation.

An actual hike would certainly trigger a violent sell-off in

dollar/yen, suggesting the risk-averse BOJ might just lay the

groundwork for a tightening in December or January.

Key developments that could influence markets on Tuesday:

- ECB bank lending survey

- U.S. Conference Board Consumer Confidence, Richmond

Fed October Manufacturing Index, Dallas Fed services survey,

August house prices