* European shares climb 0.5 percent after rises in Asia
* Euro heads back towards $1.30
* Dollar hits one-month high vs yen, eyes upside
* Spanish and Italian bonds stable ahead of EU meeting
By Marc Jones
LONDON, Oct 16 (Reuters) - European shares and the euro led
a fresh push by risk assets on Tuesday, with investors buoyed by
the latest batch of U.S. data and earnings and hopeful a meeting
of European leaders later in the week can advance plans to
tackle Spain and Greece's debts.
There is plenty more data coming in both Europe and the
United States on Tuesday: the ZEW survey will give a reading on
German business confidence; euro zone September inflation is
expected to be confirmed at 2.7 percent; and Italian trade and
British consumer and retail price data will also be released.
European shares on the FTSE Eurofirst 300 index
rose 0.5 percent to 1104 as trading resumed across the region,
with London's FTSE 100, Paris's CAC-40 and
Frankfurt's DAX all in positive territory.
The euro, which has risen almost 1 percent so far
this week, climbed to $1.2994 against a marginally weaker
dollar, albeit one which it hit a one-month high versus the yen
, supported by Softbank's bid for Sprint.
"The upcoming European session is set to be heavily
influenced by a raft of UK inflation measures, European trade
balance data, the German ZEW economic sentiment index, as well
as earnings reports from the likes of Goldman Sachs, IBM and
Intel," said Cameron Peacock, market strategist at IG Markets.
Demand for German government bonds - viewed as a safe haven
asset - dipped, with Bund futures opening slightly lower while
Italian and Spanish 10-year bonds were stable.
Ahead of a European summit on Thursday, investors are
looking for signals that may affect expectations that Spain will
ask for a bailout in the coming weeks - a move which would
activate the European Central Bank's bond buying scheme - and
that Greece will be given support to allow it stay in the euro.
Economists polled by Reuters see the ZEW sentiment index
improving to -15.0 when it is released at 1000 GMT, versus -18.2
"In terms of market-moving data, the ZEW indicators will be
the most interesting," said ABN Amro economist Nick Kounis.
"We think systemic risks have fallen, so these sort of
factors should show that better times are ahead in the next six
months or so."