MORNING BID EUROPE-Bulgaria looks east; sterling's "right" level

* A look at the day ahead from European Economics and Politics Editor Mark John and EMEA markets specialist Sujata Rao-Coverley. The views expressed are their own.

LONDON, Nov 7 (Reuters) - The pro-Moscow candidate in Bulgaria's presidential election did better than expected in the first round of the vote in a signal that the small Black Sea state, one of the newer members of the European Union, could be on the verge of a strategic shift towards Russia. Former air force commander Rumen Radev has called for an end of EU sanctions against Russia and has said Bulgaria should hedge its bets when it comes to international alliances. Purely coincidentally, Bulgaria's northern neighbour Serbia is hosting joint military exercises with Russia today.

What is the "right" level for sterling? Reuters has a snap poll of economists after the November Inflation Report meeting at which the BoE (Shenzhen: 200725.SZ - news) raised its near-term growth forecasts and adopted a neutral bias. The survey asks economists for the level of sterling (GBP and EURGBP) they think would be ideal for the economy right now, as well as how high inflation can go next year before the MPC reconsiders its policy stance. Given the large upgrade to the BoE's latest growth projections, economists will also be asked if they are considering revising their Q4 2016 GDP forecasts, which in the October poll (median 0.1 percent) were significantly lower than the BOE's new forecast of 0.4 percent.

MARKETS AT 0755 GMT

With (Other OTC: WWTH - news) just over a day to go before voting starts in an extraordinarily divisive U.S. election, markets are enjoying a last minute bounce. The dollar index is up 0.6 percent, US and German yields have risen and equity futures are up 1.3 percent, pointing to a stronger open for Wall Street after nine straight loss-making sessions (the longest losing streak in 35 years). The Mexican peso has rallied 2 percent and emerging stocks are up 1 percent. Gold (Other OTC: GDCWF - news) has fallen after posting its best week since September and oil is up as well. But investors are likely to remain jittery and headline driven, possibly with memories fresh of the Brexit-eve bounce.

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

- China Oct FX reserves

- Indonesia Q3 GDP

- Europe corp events: HSBC, Telecom Italia (Other OTC: TIAJF - news) , Ryanair, Ferrari (Berlin: 2FE.BE - news)

- Swiss Oct inflation

- German Sept industrial orders, Spain Sept industrial output, Denmark industry output

- EZ Sept retail sales

- ECB VP Constancio speaks in Brussels

- US Q3 earnings: News Corp (Other OTC: NWSAL - news) , Albemarle Corp, Marriott, Cognizant

- Mexico Oct consumer confidence

- Euro group meeting in Brussels (Editing by Sonya Hepinstall)