MORNING BID EUROPE-Debt relief in offing for Greece

* 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 25 (Reuters) - The European Union may just have averted one of the handful of crises looming over it this summer with last night's deal to offer 10.3 billion euros in emergency funding in return for the latest batch of economic reforms, plus crucially its firmest offer yet of debt relief from 2018 (conveniently after Germany's next general election). There are still details to be resolved but the accord still stands as a genuine breakthrough, overcoming weeks of wrangling between the IMF and the Europeans and allowing the Fund to remain one of the bailout partners.

Workers at France's CGT union have voted for a 24-hour strike at Nogent-sur-Seine nuclear plant starting this evening, throwing an unpredictable new element into the stand-off with the government over Francois Hollande's unpopular labour reforms. Up to now the general sense was that the government could sit tight and ride out the refinery strikes and port blockades by breaking up the worst ones with riot police. In theory France has enough emergency fuel stocks to keep petrol stations open for up to two months, but already local shortages are being exacerbated by panic buying. A new touch: some motorists have cottoned on to real-time mobile phone applications to find out where they can refill without queuing for hours.

Lots of ECB policymakers are out and about today on the last day before a quiet period leading to the June 2 meeting. The message so far has been a clear "let's wait and see how our programme works". Speakers (Milan: BEC.MI - news) include ECB chief economist Praet and council members Villeroy, Linde (Amsterdam: LE6.AS - news) and Knot speaking at a conference in Madrid. Germany's GfK (Swiss: GFK.SW - news) survey came in strongly this morning, showing that morale among German consumers remains at high levels. The closely-watched Ifo index is due out later.

MARKETS AT 0645 GMT

In terms of mood swings, Tuesday was quite a day. A dour start turned into one of the best days of the years, with many scratching their heads as to why the sudden ebullience. Three culprits stand out. Most obvious was news of the biggest gain in U.S (Other OTC: UBGXF - news) . home sales in 24 years in April, reinforcing a stream of punchy industrial, retail and even consumer price reports for the month and suggesting the U.S. economy may well be strong enough to absorb a rate rise without blinking. But the shift in the tone happened well before the home sales report, and sterling's eye-catching performance points to easing fears of Brexit at next month's referendum as more opinion polls break decisively to 'Remain' and bookies shift odds to show only a 20 pct chance or less of a vote to go. To the extent that Brexit fears have been a weight on all European markets and risk appetite in general, then that's permeating well beyond the pound. The other positive is the Greek debt talks, where the eurogroup hailed a 'breakthrough' deal late last night to give Greece more than 10 billion euros of new cash and debt relief in 2018 in return for continued fiscal reforms from Athens. That looks likely to take another potential summer scare off the table. Even (Taiwan OTC: 6436.TWO - news) the emerging market stories looked up a bit, with Turkey's government retaining market-friendly Simsek as deputy prime minister as the central bank cut interest rates, Nigeria agreeing to move to a more 'flexible', if still undetermined, FX regime and Russia managing to sell $1.75 billion of Eurobonds, mostly to unnamed foreign investors, it claims.

Wall St stocks added more 1 pct, led by banks and tech firms. With (Other OTC: WWTH - news) the dollar on the rise again, Tokyo followed suit and the Nikkei rose 1.6 pct today. Hong Kong was up more than 2 pct, and Seoul and Jakarta bourses were up about 1 pct. With oil and commodities pushing higher again too on brightening demand horizon, futures show European stocks are expected to add up to 1 pct more to Tuesday's gains. The dollar index has backed off a bit after yesterday's rally to near two-month highs, but euro/dollar remains comfortable below $1.12 while 2-year U.S. Treasury yields nudge highest levels since mid March.

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

- European corp events: Marks & Spencer (Other OTC: MAKSF - news)

- ECOFIN meeting in Brussels

- Germany May Ifo

- Germany auctions 30-yr bund

- Sweden, Norway government bond auctions

- Italy March industrial orders

- Belgium May leading indicator

- Poland April jobless

- Turkey May manufacturing confidence, cap use

- US Q1 earnings: Tiffany

- US March home prices

- Bank of Canada rate decision

- Mexico central bank's quarterly inflation report

- Mexico April trade

- US Treasury auctions 5 yr notes, 2-year FRNs

- Dallas Fed chief Kaplan speaks in Houston (Editing by Sonya Hepinstall)