Growing expectations of a split government after the U.S. midterm elections are supporting U.S. shares, while Asian markets stubbornly cling onto hopes that China will relax its strict pandemic curbs.

Banking stocks could be in focus in Europe on Tuesday after the European Central Bank's top supervisor Andrea Enria said the ECB is carefully scrutinising euro zone banks' payout plans as the outlook for the 19-nation currency bloc's economy weakens.

Some of Europe's largest banks have posted stronger-than-expected profits for the past quarter, boosted by a trading boom in volatile markets and higher interest rates, though they warned of growing risks as the economy fizzles.

Meanwhile, as world leaders and diplomats framed the fight against climate change as a battle for human survival at the opening speeches of the COP27 summit in Egypt, the Telegraph newspaper reported that British Prime Minister Rishi Sunak is set to announce a major natural gas deal with the United States after the summit.

Europe's finance ministers have said that measures to support euro zone economies against soaring energy prices could complicate 2023 budget plans if they need to be extended into the spring, noting the potential impact on already high inflation.

For global markets, the U.S. midterm elections will be the big event to monitor.

Non-partisan election forecasters predict Republicans are likely to pick up roughly 25 seats in the 435-seat House of Representatives, more than enough to win a majority.

And analysts say Republicans could also pick up the one seat they need to win control of the Senate.

While a conclusive result could take days, the focus will clearly be on former U.S. President Donald Trump's planned "big announcement" on Nov. 15 after he suggested he would mount a 2024 presidential run as soon as next week.

Asian shares ticked higher on Tuesday, encouraged by gains on Wall Street and hopes of China's eventual economic reopening.


Graphic: 2022 U.S. elections poll closing times -

Key developments that could influence markets on Tuesday:

Economic data: UK BRC retail sales, euro zone Sept retail

sales

Bank of England chief economist Huw Pill participates on panel debate on "Global monetary policy challenges"

Europe earnings: Deutsche Post, Bayer, Pandora, Porsche

U.S. earnings: Walt Disney, Wynn Resorts

(Reporting by Anshuman Daga; Editing by Jacqueline Wong)