MORNING BID EUROPE-Brexit-proofing Ireland

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

LONDON, Oct (Shenzhen: 000069.SZ - news) 11 (Reuters) - Not so long ago the main question about Ireland (Other OTC: IRLD - news) 's budget today was whether Prime Minister Enda Kenny's minority government could actually get one through parliament. That seems to have been settled since main opposition party Fianna Fail gave the nod last week to a package set to include modest tax cuts and spending hikes plus, more interestingly, a batch of measures aimed at "Brexit-proofing" its recovering economy. These could include keeping a lower VAT rate for the tourism sector and a cut to the rate of capital gains tax for entrepreneurs. More controversially, exporters could be offered a preferential exchange rate via a national hedging strategy. Ireland's economy is among the most exposed to Brexit, but others in the bloc will be watching closely how it fares. The announcement is due from 1200 GMT.

MARKETS

Brent crude's break above $53 on Monday to its highest level in 12 months on Russia's stated willingness to join Saudi Arabia and other OPEC members in cutting production next month is already being dubbed the 'Putin pop' in some circles. But it's unsettling world bond markets at a sensitive policy moment even though it's a boon in the short-term at least for energy-heavy blue chip stock indices. Oil prices are now turning positive year-on-year and will start to directly filter into inflation expectations again if they keep rising from here. Brent has slipped back a bit toward $53 earlier today, but the supply picture is building alongside a stream of above forecast economic readings from around the world into the end of Q3 and as December Fed rate rise expectations have moved as high as 66 percent. Treasury yields and the dollar are motoring higher again, with the 10-year yield topping 1.77 percent for the first time in four months, dollar/yen testing 104/$ and euro/dollar probing $1.11. The line of least resistance for the dollar continues to be the weakening pound, which is back as low as $1.23 for the first time since Friday's 'flash crash' as Hard Brexit fears have been compounded by the latest UK press reports that the British Treasury estimates it will lose about 66 billion pounds in revenue and 9.5 percentage points in GDP growth over 15 years if the country is excluded from the EU single market. But G7 bond yields are rising more generally than Treasuries, with one eye on the oil price. Ten-year Japanese Government Bond yields rose 2 basis points overnight, as Tokyo returned from a holiday and riffed off Sunday reports that Bank of Japan chief Kuroda said there would be no more easing right now. Ten-year German bund yields, back in positive territory after last week's reports the ECB may taper its bond buying programme before it ends it, pushed to four-week highs of 0.065 percent on Monday. The oil price has helped buoy Wall St stocks overnight, with the stabilization of crude over recent months also helping aggregate earnings forecasts as we start the Q3 earnings season stateside this week. Alcoa (NYSE: AA - news) reports later, with JPMorgan (LSE: JPIU.L - news) and other banks on Friday. Asia bourses were more mixed earlier, however, with Seoul's Kospi index down more than one percent as Samsung stock got hammered on a forced halt to its Galaxy Note 7 product.

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

* UK BRC Sept retail sales

* Australia Sept business confidence

* Chicago Fed chief Evans speaks in Sydney

* Europe corp events: Ted Baker HY, LVMH sales update

* ECOFIN meeting in Luxembourg

* Germany Oct ZEW index

* Austria government bond auction

* Ireland presents 2017 government budget

* Sweden Sept jobless, inflation

* SAfrica Aug manufacturing production

* Poland Sept inflation

* Russia's Putin visits Turkey

* US Q3 earnings: Alcoa

(Editing by x x)