* Euro zone periphery govt bond yields: tmsnrt.rs/2ii2Bqr
* European stocks edge lower on mixed earnings
* Sterling softer ahead of key Brexit votes
* U.S., China sound upbeat on trade talks
* Trudeau's Liberals to form minority govt
By Tom Arnold
LONDON, Oct 22 (Reuters) - European shares edged lower on Tuesday as talk of progress in China-U.S. trade talks was offset by mixed corporate earnings, while sterling retreated ahead of another vote on Brexit.
The broad European STOXX slipped 0.3%, and MSCI's world equity index, which tracks shares in 47 countries, was flat at 0.02% lower.
French speciality minerals company Imerys slipped 6% after cutting its outlook for 2019, and Norway's Aker BP moved marginally lower as it slashed its full-year oil output target.
British household goods maker Reckitt Benckiser was stranded at the base of the STOXX index with a 5% fall after it cut its full-year sales forecast for the second time this year.
In Switzerland, drugmaker Novartis raised its 2019 target and reported better-than-expected revenue, while Apple supplier AMS climbed 6% as demand from smartphone makers boosted operating profit.
Shares of UBS led gains among banking stocks after Switzerland's biggest bank reported a smaller than expected loss in quarterly profit.
Swedish defence firm Saab gained 7% to lead the STOXX 600 after reporting third-quarter operating earnings well ahead of market forecasts and affirming its view that operating cashflow this year would improve versus 2018.
"This week is an important week for earnings," said Andrew Milligan, head of global strategy at Aberdeen Standard Investments. "We've seen a lot of talk on Brexit and trade talks and the new news is the earnings and the signal they give for the future. We've broadly priced in that earnings will be slightly positive for the year, but everyone is seeing how monetary policy stabilises the situation."
E-Mini futures for the S&P 500 slipped 0.14%.
MSCI's broadest index of Asia-Pacific shares outside Japan added a modest 0.4%, with a holiday in Tokyo keeping turnover light.
China and the United States have achieved some progress in their trade talks, Vice Foreign Minister Le Yucheng said on Tuesday, adding that as long as both sides respected each other, no problem could not be resolved.
U.S. President Donald Trump sounded upbeat on a China deal on Monday, while White House adviser Larry Kudlow said tariffs on Chinese goods scheduled for December could be withdrawn if talks go well.
Meanwhile, euro zone government bonds dipped before votes in Britain's parliament crucial to determining whether the country can leave the EU in an orderly way at the end of the month.
Ten-year government bond yields across the euro zone were down 1 basis point on the day,, . Germany's 10-year yield was at -0.35%, near three-month highs.
After he was forced by opponents into asking the EU for a delay that he had promised he would never ask for, Prime Minister Boris Johnson is battling to push legislation through the House of Commons that will enact his last-minute Brexit deal. Lawmakers vote around 1800 GMT on the 115-page Withdrawal Agreement Bill and then vote on the government's extremely tight timetable for approving the legislation.
Sterling slipped 0.1% to $1.2947 in early London trading. It was flat against the euro, and was last trading against the single currency at 0.86050.
"If the House of Commons votes in favour of the deal, GBP/USD could rally towards $1.3500 over the medium term. The UK would then enter a transition period that lasts until 31 December 2020," said Kim Mundy, a currency strategist at CBA.
The Canadian dollar was little changed as the ruling Liberal government of Justin Trudeau held onto power but with a minority government after a closely fought election.
In commodity markets, spot gold inched 0.2% higher to $1,487.20 per ounce.
Oil prices edged lower as the market fretted about the health of the global economy and the future for energy demand. Brent crude futures were down 10 cents at $58.86, while U.S. crude lost 12 cents to $53.19 a barrel. (Additional reporting by Wayne Cole in Sydney; editing by David Evans)