MORNING BID EUROPE-Britain's new Mr Brexit goes to Brussels

* A look at the day ahead from EMEA Head of Desk Jon Boyle and Deputy EMEA Markets Editor Sujata Rao. The views expressed are their own.

LONDON, July 19 (Reuters) - Britain's new minister for leaving the European Union, Dominic Raab, holds his first negotiations with Michel Barnier, the EU's pointman on Brexit later on Thursday. Barnier thus far has been non-committal on the proposals thrashed out by Prime Minister Theresa May with her cabinet at her official country retreat, saying only he would assess them to see if they were "workable and realistic".

But May's concessions to hardline eurosceptics within her party have only fanned the flames of rebellion among pro-EU Conservatives. The question increasingly being asked is whether a coherent soft Brexit – May's preferred strategy – is possible. Such is the state of flux in the UK that with eight months to go to Departure Day, Raab is stepping up preparations for a disorderly departure from the European Union.

May, meanwhile, is travelling to Northern Ireland to soothe business leaders worried about the imposition of a hard border with EU member Ireland (Other OTC: IRLD - news) . Northern Ireland lawmakers have made clear to May, who is reliant on their support in parliament to stay in office, that they will not accept any deal that keeps the province inside the EU customs union and single market post-Brexit.

May's other headache is Russian. UK investigators now believe they have identified a number of Russians behind the Novichok nerve agent attack on Russian double agent Sergei Skripal and his daughter Yulia in March. While they both survived, a woman died earlier this month after being exposed to the same nerve agent. The Skripal attack led to expulsions of Russian diplomats by Britain and her allies. Russia responded in kind and denies any role in the attack.

MARKETS AT 0715 GMT

Looking just at Wall Street yesterday, you would not have thought a trade war had just kicked off, the U.S. Fed is bent on raising interest rates and world growth is becoming a concern, at the margins at least. The S&P 500 stands less than 2 percent off all time peaks, hitting five-month highs and lifting MSCI world shares to one-month highs. The driver is the earnings season that’s delivering more than 21 percent growth in profits. Yesterday’s session in New York saw Amazon crossing the $900 billion mark and Morgan Stanley (Xetra: 885836 - news) posting better-than-expected results. Microsoft (Euronext: MSF.NX - news) and Bancorp are among those due to report later today. Positive momentum initially carried over into this morning’s Asian session before trade war fears resurfaced again, hitting Chinese markets first then pushing Asian equities broadly lower. Reminders of growth and trade fears came from South Korea which trimmed 2018 forecasts for GDP and inflation; and also from Japan where year-on-year exports to the United (Shenzhen: 000925.SZ - news) States dropped for the first time in 17 months. The Reuters Tankan survey also showed a souring in Japanese business sentiment. The Nikkei closed lower.

In currency markets, it’s still about the rampaging dollar which is approaching one-year highs after bullish testimony from the Fed’s Powell, with two more rate rises this year seen as a more or less done deal. The greenback is up again today against a basket of currencies. Meanwhile the yuan has touched one-year lows to the dollar in the offshore as well as onshore markets, hit by dollar strength but also expectations that the central bank will continue to loosen policy via reserve ratio cuts. That’s dragging on other emerging currencies, with the Indian rupee approaching record lows again. Sterling is also at the sharp end of the dollar strength, falling to 10-month lows after data yesterday showing inflation failed to rise. Another test comes today – British retail sales data – typically a volatile print, it is expected to have risen thanks to warm weather and the royal wedding. But markets still price almost a 70 percent chance of a 25 bps rate rise next month, though the odds stood at close to 80 percent before the inflation numbers.

Upcoming events/data/themes Japan June trade, July Tankan Indonesia central bank policy decision Australia June jobless Europe corp events: ABB (LSE: 0NX2.L - news) , Alstom (EUREX: 2229080.EX - news) (Sales), Anglo American (LSE: AAL.L - news) (Sales), Babcock (IMS), Covivio, Dassault Aviation (LSE: 0IAX.L - news) , Epiroc, Essity, Fortum (LSE: 0HAH.L - news) , Gecina (LSE: 0OPE.L - news) , Givaudan (LSE: 0QPS.L - news) , Kone (LSE: 0II2.L - news) , Kuehne + Nagel, Moneysupermarket.com, Nordea Bank (LSE: 0JNL.L - news) , Publicis Groupe (LSE: 0FQI.L - news) , SAP (Amsterdam: AP6.AS - news) , SKF (LSE: 0NWW.L - news) , SSE (Amsterdam: UW8.AS - news) (Trading), Swedish Match (LSE: 0GO4.L - news) , Unilever (NYSE: UL - news) , Volvo, Wartsila Swiss June trade Spain government bond auction UK June retail sales UK auctions 2057 gilts SAfrica central bank policy decision Ireland Q1 GDP US Q2 earnings: Microsoft, Bank of New York Mellon, E*Trade, Danaher (Swiss: DHR.SW - news) , BB&T Corp, Philip Morris, Union Pacific (Swiss: UNP.SW - news) , Travelers, Fifth Third Bancorp (Frankfurt: 875029 - news) , Capital One (IOB: 0RCZ.IL - news) , US July Philadelphia Fed index, weekly jobless claims (Editing by Alison Williams)