MORNING BID EUROPE-Reshaping Britain's post-Brexit economy

* A look at the day ahead from European Economics and Politics Editor Mark John and EMEA markets editor Mike Dolan. The views expressed are their own.

LONDON, Jan 23 (Reuters) - You can't run an economy on media soundbites, which is why British PM Theresa May's "modern industrial strategy", unveiled today, will be scrutinised for genuinely new measures. Industrial policy has been something of a dirty word in Britain, notably since the failure of a state-sponsored attempt to re-organise the auto sector around the ill-fated British Leyland in the 1970s and 1980s. This time, according to a summary released ahead of time, the aim is to develop high-potential sectors by cutting regulatory barriers while smoothing out regional imbalances. Some of the 10 "pillars" of this strategy look like things you would expect any government to seek to nurture anyway -- one is "developing skills", for example -- but more specific detail will be worked out in the consultation period now opening. There is some urgency on this: intimations of a "hard" Brexit are prompting some of the players in Britain's key financial services sector to draft plans to shift resources aboard -- the latest being Morgan Stanley (Xetra: 885836 - news) and Citi, according to sources involved in the process.

French conservative presidential candidate Francois Fillon gets full honours from Germany's ruling CDU, his political bedfellows, during a visit to Berlin today. He will be offered not only a meeting with Chancellor Angela Merkel but the chance to look statesman-like with a keynote speech in the German capital's Konrad Adenauer Foundation. It looks as though Merkel, herself up for re-election in September, will not give him her explicit backing, however. She (Munich: SOQ.MU - news) did so for the 2012 French conservative Nicolas Sarkozy -- and he ended up losing. It would seem Merkel may be getting cautious as she prepares to launch her own campaign. Watch out also for differences of approach to Europe: Fillon has started talking about a two-speed European Union based around a hard core of countries in the euro zone that would forge ahead with new joint projects. Germany meanwhile has sought to get the entire bloc (whose membership falls to 27 with the exit of Britain) moving towards greater integration at the same speed.

MARKETS AT 0755 GMT

Three days into his presidency and Trump appears to have lost the benefit of the doubt, in the eyes of the markets at least. Trump's inauguration speech, dubbed "divisive, aggressive and nationalistic" by Unicredit (EUREX: DE000A163206.EX - news) 's chief economist over the weekend, was seen by most market watchers as short on detail again and more akin to his protectionist campaign speeches than what many had seen as the more conciliatory and inclusive election win acceptance speech back in November. As important for many strategists has been what Morgan Stanley sees as "execution risk" on his expected fiscal stimulus and tax reform plans, confusion over whether Congress wants corporate tax cuts to be revenue neutral and Trump's own wariness of a higher dollar and his scepticism about the complexity of the border tax idea, something that had been seen as a key bulwark for a higher dollar going forward. JPMorgan (LSE: JPIU.L - news) analysts, meanwhile, urge clients to try to see through the political "noise" for now and focus instead on the strength of the economic numbers coming through. Either way, the dollar and Treasury yields have retreated again since Friday's inauguration and US and European stock futures are lower. German bund yields are lower too, with some houses talking of "safety bids", given the bellicose nature of Trump's trade threats and "America First" rhetoric. The DXY dollar index is down about 0.5 pct, with euro/dollar hitting a 6-week high of $1.0755, dollar/yen at a 6-week low of 101.21 and sterling at a 5-week high of $1.2472. The S&P500 ended slightly higher on Friday, even though the Dow Jones still stayed shy of the 20,000 milestone. Japan's Nikkei225 lost more than 1 pct on yen strength, but the rest of emerging Asia bourses were more stable given the easier dollar and Treasury yields. Europe stocks were marked about half a percent lower. Sterling's slight gains against both dollar and euro come ahead of Tuesday's UK Supreme Court ruling on the need for parliamentary endorsement of the Article50 Brexit trigger - a ruling that may well hinge on what the court says about the role of regional assemblies in Scotland, Northern Ireland and Wales. The new "hard Brexit" stance from the British government since last Tuesday raises the chances that Scotland may table another referendum on independence, and the absence of a Northern Ireland assembly until March 2's election there adds a wrinkle on the timing of when it would endorse the trigger. UK PM May also visits Trump on Friday, to discuss future trade deal among other things. The other big weekend news was the primaries for the French socialist party candidate for this year's presidential election. The surprise win for Benoit Hamon over favourite former PM Manuel Valls sets up an interesting run-off and some banks, including Barclays (LSE: BARC.L - news) , reckon the shift in voting patterns ultimately ups the chances of centrist Macron in the eventual presidential vote. Despite the general ebbing of the Trump reflation enthusiasm, Brent crude has held up well at about $55pb.

Upcoming events/data/ themes for market reports on Monday:

* European corp events: SGSN earnings, Paddy Power Betfair (Other OTC: PDYPF - news) trading

* EU General Affairs Council meets in Valletta, to Tues

* Belgium OLO auction

* Turkey Jan consumer confidence

* Israel interest rate decision

* US Q4 earnings: Halliburton (Swiss: HAL.SW - news) , Yahoo (NasdaqGS: YHOO - news) , MacDonalds

(Editing by Andrew Heavens)