MORNING BID EUROPE-Brexit: proceed to Phase 2

* 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, Dec (Shanghai: 600875.SS - news) 8 (Reuters) - Britain has finally got the green light to proceed to the next phase of Brexit talks after it came back with promises on the Irish border that have placated its DUP allies in Belfast while keeping Dublin happy. As PM Theresa May explained in an early-morning press conference in Brussels, the hope is that the free- trade deal that the UK gets with the European Union is going to be so free and easy that the North-South border will be transparent anyway; and if it doesn't get that kind of deal, it will just come up with "specific solutions". A lot is still left unsaid: the DUP is already out there saying more clarity is needed on how exactly this will work without Britain staying in the EU single market and customs union; meanwhile, Scotland's Nicola Sturgeon insists that if special arrangements are needed, Scotland should get them, too. There is a lot of detail on expat rights and other areas in the negotiators' 15-page joint report that needs picking through, but for now the take-away is that the political will has at least been found to proceed to the second phase of Brexit talks, covering the future trade arrangement. That is when the real fun will start.

In Berlin, Germany's Social Democrats (SPD) agreed to hold talks with Chancellor Angela Merkel's conservatives on forming a coalition in an effort to end the political impasse in Europe's largest economy. The SPD, already badly burnt by a previous coalition dominated by Merkel, is at pains to stress the talks are "open-ended" - that is, they could result in a decision not to form an alliance. Rough scheduling is for them to start next Wednesday and last several weeks at least.

Poland-watchers are poring over last night's developments in which the ruling conservatives named Finance Minister Mateusz Morawiecki as the country's new prime minister. Morawiecki will replace the popular Beata Szydlo and is seen as only the beginning of an expected broader government reshuffle ahead of a cycle of local and national elections starting next year. The best explanation of the move so far is that Morawiecki, an ex-banker, has won the favour of Jaroslaw Kaczynski, the leader of the ruling Law and Justice party and the country's most eminent politician.

MARKETS AT 0755 GMT

Another wild ride for Bitcoin, which first roared past $16,000, then plunged 12 percent below $15,000, then recovered some of the losses to stand almost 5 percent lower. An eventful day also likely for sterling which is at six-month highs against the euro on expectations of a Brexit deal. World stocks, on the other hand, are still holding off the record highs reached last week and the MSCI (Frankfurt: 3HM.F - news) global index is seesawing today despite forecast-beating data in China and Japan and a deal to avert a government shutdown in the United States. The index is set to close with a weekly loss. The US Treasury curve has steepened off 10-year lows.

Wall St closed higher, with tech stocks rebounding. In Asia, Hong Kong, Tokyo and mainland Chinese shares also rose, helped by data showing Japan’s economy grew a revised 2.5 percent in Q3. That was twice the original estimate and marked a seventh quarter of expansion. Chinese exports and imports also accelerated in November after the previous month’s slowdown.

Now (Frankfurt: 11N.F - news) for US jobs data: investors are looking for 200,000 jobs to have been added in November after ADP private-sector hiring data on Thursday came in slightly above expectations at 185,000. Keeping people nervous is the Fed, which is expected to raise interest rates next week but could signal more rate hikes in 2018 than markets are now factoring in.

Currencies: The dollar is firmer around 2 1/2-week highs against the basket after a debt-ceiling deal, but sterling is the focus, rising to six-month highs to the euro and an 18-month high to the yen on a deal over Britain’s post-Brexit land border. There is some wariness, however: gauges of market volatility for sterling remain near multi-week highs. EU Brexit negotiator Barnier speaks at 1130 GMT.

Bitcoin is trading 5 percent lower at $15,850, well off the record highs above $16,000 touched earlier. This weekend will see the launch of the first cash-settled futures contract on the cryptocurrency by the CBOE and CME.

European shares are seen opening higher across the board, following an Asian rally as economic news from China and Japan beat all expectations.

Continental (IOB: 0LQ1.IL - news) blue-chips are expected to hit a week’s high and even the FTSE is seen higher despite sterling's rise.

Other movers today: Sharp (Swiss: SHA.SW - news) moves in Steinhoff shares still expected today after its collapse. It has plunged another 45 percent in Joburg trade before its Frankfurt-listed shares start trading. Chinese chipmaker Tsinghua Unigroup raises its stake in Apple (NasdaqGS: AAPL - news) supplier Dialog Semiconductor (LSE: 0OLN.L - news) ; Ubisoft cuts sales guidance and delays three game releases; Berkeley Group reports half-year profit up 36 percent but says 2027/2018 results will be represent a peak; Swiss Re CFO quits after seven years.

Emerging markets: Emerging stocks bounce off two-week lows, as Asian tech stocks track the Wall Street FANGS higher, but the index is set for a second week of losses. Upcoming events/data/ themes for market reports on Friday China Nov trade Japan Q3 GDP revision Australia Oct housing finance Europe corp events: Air France KLM November traffic, Berkeley Group H1 earnings, Associated British Foods AGM German Oct trade France Oct industrial output UK Oct industrial/manufacturing output, trade data Iceland Q3 GDP US Nov employment report, Dec UMich confidence Moody’s reviews sovereign credit rating of Slovakia. S&P reviews Estonia. Fitch reviews Poland, Iceland. ECB policymaker Francois Villeroi speaks EU’s Barnier speaks

(Editing by Larry King)