European stock markets tumbled on Friday in the wake of steep losses in Asia and Wall Street, but the source of the panic, Deutsche Bank, (DB - Get Report)   retreated from 33-year lows in the course of the morning.

Deutsche Bank was recently up 1% at €10.36 after it had  earlier crashed through the symbolically important €10 threshold. The stock had fallen 6.7% on Thursday in New York having plunged more than 7% in late trading in Europe after Bloomberg reported that a group of hedge funds that do derivatives business with the bank had reduced their exposure. The bank insisted once again on Thursday that it was well capitalized.

The Euro Stoxx banking index was recently down more than 3%.

Commerzbank was down 5.2%, leading the Dax lower. The company yesterday announced 9,600 job cuts, the suspension of its dividend and €700 million ($782.9 million) of write-downs. 

In London Royal Bank of Scotland (RBS) was down more than 2%. The company laid out its proposed structure for the post-January 2019 "ring-fencing" regime in the U.K., under which large British lenders will have to hold capital buffers around their retail banking and other less risky businesses.

The Dax was recently down 1.06% at 10,305.65.

In London the FTSE 100 was down 0.83% at 6,861.67.

In Paris the Cac 40 was down 1.46% at 4,379.15.

U.S. futures pared early losses, with the Dow Jones mini down 0.21% and the S&P 500 mini down 0.17%.

The Office for National Statistics  on Friday said the British economy expanded by 0.7% in the second quarter in the latest incarnation of its GDP figures. The growth was above its earlier estimate of 0.6% though the stats office revised down year-on-year growth to 2.1% from 2.2%. More recent figures for the services sector showed month-on-month growth in July picked up to 0.4% from 0.3% in June. The sector accounts for 79% of economic output in the U.K.

A Gfk consumer confidence index for the U.K. showed British consumers have shrugged off initial post-Brexit vote panic, with the index leaping in September by the most month-on-month since June 2015.

Separate data showed housing price growth - a key determinant of the British feel-good factor - softened in September.

In Germany a report showed August retail sales slipped more than expected month-on-month, adding to the mixed-messages recent data have thrown up about the strength of the consumer economy.

Later today the European Union's statistics arm will release preliminary September inflation figures for the euro zone.

September price data from Germany on Thursday set an encouraging tone after August's disappointingly anemic price growth and analysts are looking for a doubling of the euro zone inflation rate to 0.4%.