MORNING BID EUROPE-Catalan crisis: a tough day at the office

* 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, Oct (Shenzhen: 000069.SZ - news) 30 (Reuters) - Rarely has there been so much world interest on public sector workers turning up for their nine-to-five jobs. The behaviour of Catalonia's 200,000 civil servants this morning is the latest test of where the region's stand-off with Madrid is heading. The main group behind the pro-independence campaign has called for a campaign of civil disobedience and all eyes are on whether those in the public sector actually turn up and, if they do, whether they carry out their jobs as usual. The other potential flashpoint is the offices of pro-independence government officials and lawmakers, where the question is whether they try to gain access and whether the Catalan police, the Mossos d'Esquadra, follow orders from Madrid to prevent them. Financial markets have their eye on a slightly longer-term game: they are up this morning after a weekend poll suggested Catalan secessionists could lose their majority in a new regional election now scheduled for December.

Northern Ireland, meanwhile, may be edging closer to direct rule from London. Britain will have to bring in legislation to set a budget for the province if its political parties cannot reach an agreement to restore their power-sharing government today. Talks have stalled, with the Irish nationalist Sinn Fein party and the pro-British Democratic Unionist Party (DUP) at odds over the rights of Irish language speakers and same-sex marriages. Imposing a budget from London would be the closest Northern Ireland has come to an outright return to direct rule in a decade, potentially destabilising a delicate political balance in the formerly strife-torn region.

MARKETS AT 0630 GMT After the tech-led whoosh in Wall St equities back to record highs on Friday, it’s been more of a scattergun session early Monday. The upbeat earnings readings from the likes of Amazon and Alphabet (Xetra: ABEA.DE - news) and indications from Apple (NasdaqGS: AAPL - news) that pre-orders for its new iPhone X are ‘off the charts’ all helped the MSCI World index of global stocks come within a whisker of its all-time record on Monday before backing off. Part of that late caution was related to a sharp retreat in Shanghai stocks, which recorded the biggest one-day drop in 11 weeks on concerns about a wave of Initial Public Offerings and as China's 10-year treasury bond yields jumped to their highest level in more than three years amid expectations of a further government clampdown on risky lending. On the other hand, Tokyo, HK and Seoul benchmark stock indices were more mixed and little changed overall on Friday. Brent crude oil also continued to push higher above $60 to levels not seen in over two years after indications last week that Saudi Arabia would back an extension of OPEC output cuts. S&P500 futures were in the red early on Monday after Friday’s surge and European stock markets are expected to open flat, with a rebound in Spanish stocks and bonds under way after Madrid imposed direct rule on Catalonia at the weekend following a declaration of independence by the Catalan regional assembly. A weekend opinion poll indicated that the Catalan secessionists may lose their majority in a regional election set for December by Madrid. Still basking in the wake of the European Central Bank’s ‘dovish taper’ last week, European bond markets may be buoyed further by Friday’s Standard & Poors decision to lift Italy’s sovereign credit rating to BBB from BBB-.

In a heavy week for European earnings, HSBC shares are expected to nudge higher at the opening after the bank reported profits broadly in line with forecasts. Elsewhere, the dollar and U.S. Treasury yields were on the back foot, giving up gains made last week on a blowout U.S. Q3 GDP report and rising speculation that Fed governor Jerome Powell would get the nod from President Donald Trump to succeed Fed chair Janet Yellen at the helm of the central bank next February. Helped by developments in Spain and Italy, euro/dollar was a touch higher on Monday after last week’s ECB-related plunge. * Europe corporate events: HSBC, Bankia (Amsterdam: QU8.AS - news) , Audi (IOB: 0FG8.IL - news) , Galp Energia

* Germany Sept retail sales

* Swiss Oct KOF indicator

* Germany, Spain Oct flash inflation

* Italy government bond auction

* UK Sept mortgage, consumer credit data; independent IFS details UK budget options

* EZ Oct consumer/business confidence

* Turkey Oct economic confidence index

* US Q3 earnings: Noble Energy (Frankfurt: 860720 - news) , Dominion Energy, Loews etc

* US Sept personal consumption, savings, PCE price index (Editing by x x)