MORNING BID EUROPE-Brussels cautious on Italian maths

* 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, May 3 (Reuters) - We'll get the European Commission's latest forecasts on Europe's national economies at 0900 GMT today. They come after last week's data showing surprisingly high growth in the first quarter, but with inflation still doggedly low. One of the focuses is likely to be Italy. Rome argues it should be excused some 0.2 percentage points of GDP (roughly 3 billion euros) from its deficit calculation because of spending linked to the migrant crisis. Thus far a sceptical Commission has said it will look at what exactly has been spent and do any deductions afterwards. It already warned Italy in March its 2016 budget could break EU rules and told it to rein in the shortfall.

After his joint appeal with France on Monday against foreign exchange volatility, Japanese Prime Minister Shinzo Abe visits Brussels on the next leg of his European trip. A type of mini EU-Japan summit planned that is expected to focus on largely stalled free trade talks between the pair, stuck partly over Japan's non-tariff barriers.

The verbal jousting between Berlin and the ECB continues, with Mario Draghi insisting in a speech yesterday that negative rates were a symptom of the global economy's difficulties, not a cause. Pointedly he noted that Germany has had a current account surplus above five percent of GDP for almost a decade and argued that these days there simply was not enough demand for capital in the rest of the world to absorb the excess savings that creates. The answer? Draghi advocates proper reforms aimed at boosting productivity to make investment more attractive.

MARKETS AT 0645 GMT

The dollar dive continues, with dollar/yen leading the way to new 18-month below 106 lows during Japan's golden week break but with the dollar index more broadly also down to its lowest since January 2015 and euro/dollar above $1.15 for the first time since August last year. The move has snowballed since the BoJ's 'no show' last week as the Fed held the line too. Markets reckon intervention to cap the yen move is less likely in a week of holidays, but the pressure on the BoJ to stay out of the market increased as the U.S (Other OTC: UBGXF - news) . Treasury on Friday put Japan, Germany, China, South Korea and Taiwan (Taiwan OTC: 6549.TWO - news) on a list of countries with large current account surpluses that need monitoring for possible unfair currency policies. This also comes as Japan hosts the upcoming G7 meeting. Broad dollar weakness was also encouraged by the latest batch of US business sentiment data on Monday that did little to dissuade futures markets from assuming the Fed is on hold until September at the earliest. While the easing dollar helps Wall St stocks and emerging markets too, it creates the opposite problem for Europe and Japan and forces the ECB and BoJ into a policy dilemma. Australia's unexpected interest rate cut this morning, which knocked the Aussie dollar about 1 pct, underlines the pressure to ease. The S&P500 gained almost 1 pct on Monday and the Nasdaq (NasdaqGS: NDAQ - news) broke a 7-day losing streak. Shanghai was firmer. Europe was set to open steady after a hail of earnings, including slightly better than forecast numbers from HSBC.

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

- Europe corp events: HSBC, BNP Paribas (LSE: 0HB5.L - news) , Commerzbank (Xetra: CBK100 - news) , UBS (LSE: 0QNR.L - news) , AXA (Paris: FR0000120628 - news) , BMW (Swiss: BMW.SW - news) , Hugo Boss (LSE: 0Q8F.L - news) , Solvay (LSE: 0NZR.L - news) , Bollore (LSE: 0IXZ.L - news) , Coloplast (LSE: 0QBO.L - news) , Fresenius (Swiss: FRE.SW - news) , Prosieben, Aberdeen Asset Management (Other OTC: ABDNF - news) , Just Eat (Other OTC: JSTLF - news) .

- Japan PM Abe in Brussels

- UK March manufacturing PMI

- Malta central bank chief and ECB member speaks in London

- IMF releases regional Africa report in Kampala

- Sweden March industry production

- Russia April manufacturing PMI

- Turkey April inflation

- US Q1 earnings: Pfizer (NYSE: PFE - news) , Dike Energy, Starwood Hotels, CBS, Western Union, Clorox, CVS, Estee Lauder, Molson Coors

- Cleveland Fed chief Mester speaks in Amelia Island

- Atlanta Fed chief Lockhart speaks in Jacksonville

- Bank of Canada chief Poloz speaks in Santa Monica (Editing by Sonya Hepinstall)