MORNING BID EUROPE-"Davis-proofing" Brexit

* 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.

Dec (Shanghai: 600875.SS - news) 13 (Reuters) - Wary EU officials think they have found a way of safeguarding agreements reached so far with Britain from any changes of heart by the UK's mercurial Brexit negotiator David Davis.

It emerges that the EU guidelines for a future trade deal with Britain due to be approved a summit on Friday will include a caveat that talks can only proceed as long as all commitments undertaken during the first phase of negotiations are respected in full. That clause - described by one Brussels official as making last week's deal "David Davis-proof" - comes after Davis called the agreement on the divorce bill, Irish border and expat rights merely a "statement of intent".

Separately, PM Theresa May faces a challenge by party rebels in parliament today who will seek to win agreement that the assembly could send her back to the negotiating table in Brussels if they don't like any final Brexit deal. That would certainly strike a blow for Westminster democracy - but it could also complicate things massively if the EU side by then has moved on and is not minded to negotiate further.

After yesterday's climate change meeting, France's Emmanuel Macron is hosting another summit in Paris today, this time on accelerating efforts to set up a West African force to battle Islamist militants. France, which itself has some 4,000 troops in the region, is worried that the militants have scored victories in West Africa while the G5 force made of up of the region's armies has struggled to win financing and become operational. Interestingly, Saudi Arabia and the United Arab Emirates will attend the talks - a sign Gulf Arab states are upping their influence in the region.

In Berlin, Germany's Social Democrats (SPD) and Chancellor Angela Merkel's conservatives will meet for initial talks on whether to explore forming a coalition. Don't, however, expect rapid progress. This is expected to drag on for weeks.

MARKETS AT 0755 GMT

Global stocks captured by MSCI’s all-country equity index are back within a whisker of record highs early on Wednesday as world markets await the Federal Reserve’s third interest rate rise of the year later in the session and after the U.S. Republican party’s Senate majority narrowed to just two after Democrats took a relatively safe Republican seat in an election in Alabama yesterday.

Rising energy prices this week, due to temporary supply disruptions and outages, have bolstered that sector and Brent crude held firm around $64 early on Wednesday even after giving up much of the early-week spike higher overnight.

Wall St stocks clocked up record closing highs late Tuesday, with financial stocks leading the way with gains of 1 percent ahead of a widely expected quarter-point Fed hike tonight and as investors await signals from Fed policymakers about the rate horizon through 2018 and 2019.

Key to that trajectory has been the passage of President Trump’s tax cut plan through congress and both Senate and House proposals are still being debated and reconciled. But the narrowing of Trump’s Senate majority after the Alabama result overnight may yet complicate that and the rest of the administration’s economic and regulatory agenda as it heads into mid-term congressional elections next year. Tax cuts aside, it’s unclear whether that is a net positive or negative for the world economy amid some trepidation about Trump’s protectionist plans. After Tuesday’s record close, Wall St stocks futures were about 0.2 percent lower, with 10-year Treasury yields steady just under 2.40 percent and the dollar index and euro/dollar exchange rate little changed.

Dollar/yen was marginally lower, after a forecast beating jump in Japanese machinery orders in October and weighing somewhat on an underperforming Nikkei225 in Japan that slipped about 0.5 percent. The U.S. political picture was muddied by the imminent Fed decision however and stocks were also eyeing the expected confirmation later of Disney purchase of 21st Century (Shenzhen: 300078.SZ - news) Fox’s entertainment assets for about $60 billion. Adding to speculation about the course of future Fed rate rises will be the release of U.S. consumer price inflation numbers later, with the headline annual rate expected to rise to 2.2 percent and the core edging up to 1.8 percent. The rest of Asia’s major bourses were up smartly. China’s CSI300 was up almost 1 percent, while South Korea’s Kospi was up by a similar amount.

Sterling markets were awaiting the release of UK jobless and earnings numbers after the pound failed to catch a sustained lift from higher-than-expected 3.1 percent UK inflation on Tuesday. Bitcoin continued to calm down after recent breakneck gains and the spot price hovered about $16,500. * Europe corp events: Metro Q4 results, Dixons Carphone (Frankfurt: CWB.F - news) first half results, TUI (LSE: 0NLA.L - news) annual results, Ocado trading statement, AstraZeneca (NYSE: AZN - news) investor presentation, Orange AGM

* Germany final Nov inflation

* Germany’s SPD party to start exploratory talks with Merkel’s conservatives

* SAfrica Nov inflation

* Italy, Sweden government bond auctions

* UK Nov jobless, Oct (Shenzhen: 000069.SZ - news) earnings growth

* UK auctions 2036 gilts

* EZ Oct industrial production, jobless

* Iceland central bank policy decision

* US Nov CPI Inflation

* FOMC policy decision and chair Yellen’s press conference

(editing by John Stonestreet)