GLOBAL MARKETS-Euro shares rise, debt tensions ease before ECB meeting
* Portugal bond yields holding at 7.5 percent, ECB in focus * European shares recover previous day's losses * Euro edges lower, oil eases as Egypt's president overthrown By Marc Jones LONDON, July 4 (Reuters) - European bond and stock markets rose on Thursday as investors put concerns about political turmoil in Portugal to one side ahead of central bank meetings in Frankfurt and London, and Friday's U.S. jobs report. Portuguese bond yields steadied at 7.5 percent after opening at 7.7 percent, while Italian and Spanish bond markets were quiet following a sharp sell-off on Wednesday, when a deepening crisis threatened to derail Lisbon's efforts to exit its bailout. The market focus fell squarely on the European Central Bank, which economists expect to keep policy on hold later on Thursday. The same goes for the Bank of England which holds its first meeting under new governor Mark Carney. But they do expect to hear calming words to reassure investors rattled by Portugal's troubles and the U.S. Federal Reserve's plans to begin winding down its stimulus. "There is a consensus that the ECB will not touch rates or announce any new additional measures although personally I expect (president Mario) Draghi to be a little more dovish than at the last meeting," said UniCredit interest rate strategist Luca Cazzulani. "Focus on Portugal is pretty high but there has been a limited spillover into Spain and Italy so far." With U.S. markets closed for the Independence Day holiday and investors also keeping positions tight ahead of U.S. jobs data on Friday, the risk was that any surprise moves by the central banks or in Portugal could have a heavily amplified market impact. European shares were up 0.75 percent by mid-morning as markets in London, Frankfurt and Paris wiped off the previous session's losses, though afternoon trading was expected to be choppy around the ECB's 1230 GMT post-meeting news conference. Asian stocks made similar gains overnight, building on a positive finish on Wall Street. Investors were already positioning for Friday's non farm payrolls data, one of the key measures of U.S. economic health for the Federal Reserve as it looks to scale back its $85-billion-a-month stimulus programme. HEALING WORDS In the currency market, the euro hovered just below $1.30 as traders awaited the ECB's message following the recent market jitters, while the dollar sold off against the yen . Rising tensions in Portugal - where the resignation of two ministers within days saw bond yields jump back to crisis levels of 8 percent on Wednesday - coincide with fresh debt worries in Athens, where the government faces an end-of-week deadline to prove to its lenders it can push through tough reforms. The signs of stress on the euro zone's periphery risk sapping confidence in the region a year after Draghi vowed to do "whatever it takes" to save the euro, and analysts feel the Italian and his colleagues may have to give a renewed show of commitment. "I am expecting some healing words from Draghi, which should calm fears over the situations in Portugal and Greece because it is a very psychologically driven market," Rolf Bland, chief investment officer at VZ Vermogenszentrum in Zurich, said." In Egypt, the overthrow by the army of President Mohamed Mursi drew a positive reaction from investors. The country's five-year debt insurance costs falling 80 basis points and its sharply and its stock market gaining 6 percent. With the threat of a disruption in supplies from the Middle East seen as having eased after the events in Cairo, Brent oil slipped to $105.30 a barrel from a two-week high. Other commodity markets saw limited moves ahead of Friday's U.S. data. Gold edged up for a second session as Portugal and Egypt's troubles prompted safe-haven buying, while growth-attuned copper hovered near a two-week high. "If we get a sense that U.S. growth is not where people think it might be yet, that could undermine the dollar and be in general more supportive for commodity prices," said Barclay's commodities analyst Sijin Cheng.