MORNING BID EUROPE-Erdogan's Turkey: a future in Europe?

* 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, April 28 (Reuters) - European Union foreign

ministers meeting in Malta today will discuss Turkish President

Tayyip Erdogan's referendum victory and what they view as his

latest steps to dismantle the country's democratic institutions.

The bottom line is that ministers must consider whether an

increasingly autocratic Turkey remains eligible to be a

candidate for EU membership - an albeit distant prospect which

even many Turks are seeing as remote and increasingly

irrelevant. Erdogan himself says dismissively that he is not

holding his breath for EU membership.

All that said, any move that formally curtails Turkey's EU

prospects would be hugely symbolic after decades of an often

fraught courtship between the two sides. One option is for

ministers to urge a review of Turkey's progress in meeting entry

criteria and leave the final decision up to EU leaders at a

summit due in June.

Aside from the subtlest of nods to the increasingly solid

recovery in much of the eurozone, the ECB's Mario Draghi was

careful to keep the accent on the need for more stimulus at his

news conference yesterday. Not, perhaps, that surprising given

the lingering uncertainty about the French presidential election

and his continued assertion that inflation has yet to pick up

sustainable.

ECB-watchers will get more insight on the latter this

morning as Euros tat releases its latest flash CPI numbers for

the zone, combined with the ECB's own quarterly inflation

survey. Lending data and M3 (Other OTC: MTHRF - news) money supply figures are also due.

Finally, Japanese Prime Minister Shinzo Abe will be meeting

British PM Theresa May at her Chequers country residence today.

One subject that might come up is cars: Japan's automakers are a

key part of the British sector and May has promised to seek a

Brexit deal that will allow Nissan and others to flourish in

Britain.

MARKETS AT 0655 GMT

On the last trading day of April, the dollar is up a shade,

European shares are about flat and benchmark German Bund yields

are ever so slightly higher. In other words, it would appear

it's the prospect of a long weekend for most European markets

rather than the possibility of what U.S. President Donald Trump

called a "major conflict" with North Korea that is dominating

thinking.

That said, there should be plenty for markets to get their

teeth into. A first look at Q1 GDP data from the United States,

much of the euro zone and Britain is due. Euro bulls, sitting on

2 percent gains for the month, will be mindful of ECB chief

Mario Draghi's somewhat upbeat words on the euro zone economy on

Thursday, even though he said risks remained tilted to the

downside and that the central bank's policy setters had not

discussed removing its easing bias.

The euro was marginally higher at $1.0876 on Friday while

the dollar index, which measures the greenback against a basket

of currencies was up 0.1 percent. The yen was also slightly

stronger versus the dollar.

German 10-year Bund yields, which fell sharply on Thursday

after the ECB policy meeting, were 1 basis point higher at 0.31

percent.

The pan-European STOXX 600 index has gained 2.7 percent so

far this week, set for its best week since December. Earnings

should again dominate trade on Friday.

In another heavy day for company updates, especially banks,

shares in UBS (LSE: 0QNR.L - news) are up 2.8 percent in pre-market trade after

Switzerland's biggest bank kicked off 2017 with its second-best

start to a year since the financial crisis as a brighter outlook

and a spike in trading levels boosted its investment bank and

core wealth management business.

Barclays (LSE: BARC.L - news) said first-quarter profit more than doubled, driven

by lower losses in its non-core unit, even as it booked a

one-off charge on its Africa business. Royal Bank of Scotland (LSE: RBS.L - news)

swung to a better than expected first quarter profit of 259

million pounds, its first quarterly profit since Q3 2015.

Other stock movers: Electrolux Q1 profit tops forecast;

Genzyme, CHC lift Sanofi (LSE: 0O59.L - news) 's first-quarter figures; Europe, Asia,

engineering lift Linde (IOB: 0H3X.IL - news) 's quarterly profit; O2 Czech Republic (LSE: 0OHL.L - news) net

profit rises in first quarter, beating estimates; Norsk Hydro (LSE: NHY.L - news)

units missed forecast in Q1; Spain's Caixabank (Amsterdam: CB6.AS - news) posts 48 percent

rise in Q1 profit; Continental Q1 operating profit rises more

than expected; Danske Bank Q1 profit beats expectations on

improved lending, strong Nordic performance; Atlantia (LSE: 0I2R.L - news) presses

ahead with Abertis (Amsterdam: IF6.AS - news) tie-up plans after motorway stake sale;

Zodiac aims to complete Safran (LSE: 0IU8.L - news) deal, CEO offers resignation.

Asia-Pacific shares exJapan fell 0.1 percent while Tokyo

shares gained 0.3 percent as investors sat on their second

largest weekly gains since December.

Oil prices edged up after OPEC said it was keen to reach a

deal on extending its output cuts. Brent was last up 0.9 percent

at $51.91. Gold edged higher but was set for its worst week in

seven.

Emerging stocks extended their falls for a third day, but

stellar gains at the start of the week ensured the benchmark was

on track for a 1.6 percent weekly rise and the index looked

poised for a fourth straight month of gains. On the day, the

index was weighed down by losses in heavyweight South Korea's

Kospi index which snapped a six-day losing street and falls

elsewhere in Asia, after U.S. President Donald Trump announced

in an interview with Reuters that he planned to renegotiated or

scrap Washington’s “horrible” trade deal with Seoul.

The dollar nudging higher for a third straight session ups

the pressure on emerging currencies on the day, but many are on

track for monthly gains. Turkey’s lira weakens 0.3 percent but

looks to strengthen nearly two percent in a third straight month

of rises. Comments from an aide to President Tayyip Erdogan

saying the president wanted to see a more "relaxed and generous

central bank" and Wednesday’s move to raise the late liquidity

window once again fueled concerns after investors had lauded

policy makers’ move as a cautious affirmation of policy makers’

independence.

South Africa’s rand looks to add nearly 1 percent since the

start of April, though latest data shows slowing credit growth

while the government announced petrol and diesel prices would

rise from May.

Russia’s rouble is trading flat ahead of a central bank

decision which is expected to lower interest rates by 25 basis

points, or even 50 bps, in what could be the first of further

cuts amid easing inflation. On the month, the rouble looks to

snap a four month winning streak and ease 1.3 percent.

Europe corp events: UBS, Danske, Electrolux, Sanofi, Barclays (Swiss: BARC.SW - news)

interim, RBS interims, Mail.ru, Caixabank, Amundi (Berlin: 350155.BE - news) , Linde (Amsterdam: LE6.AS - news)

German March retail sales

US/Canada/UK/France/Spain Q1 GDP

France March consumer spending

EZ, Italy flash April inflation

UK BBA March mortgage approvals

EZ March credit, M3

SNB chief Studer speaks in Bern

Turkey March trade/tourism

Russian central bank policy decision

US Q1 earnings: GM (NYSE: GM - news) , Exxon Mobil (Swiss: XOM-USD.SW - news) , Chevron (Euronext: CHTEX.NX - news) , Colgate Palmolive,

Goodyear,

US April Chicago PMI, UMich sentiment

Philadelphia Fed chief Harker speaks in DC

S&P to review sovereign credit ratings of UK, Germany, Botswana;

Fitch to review Ukraine, Netherlands, Latvia, Mozambique

(Editing by Richard Lough)