MORNING BID EUROPE-Expectations weigh heavy on BoE's Carney

* 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, Nov 2 (Reuters) - Market expectations of a first Bank of England rate rise in over a decade at 1200 GMT today are by now so set in stone that any failure to oblige by Mark Carney and his team would come as a massive shock. That is despite the fact that a full 70 percent of economists polled by Reuters also believe that even the modest 25-basis-point rise widely expected would be a mistake, given underlying weaknesses in the economy and the political uncertainties surrounding Brexit. Although such a slight tightening should in theory have little fundamental impact even on an economy as highly leveraged as Britain's, there are still unknowns that could come into play: this is the first time that eight million Britons and even many City operators and their increasingly automated trading systems will have to deal with a rate hike of any kind.

Catalonia's secessionist leaders will appear before a court in Madrid this morning to answer charges of rebellion and sedition, though not, it appears, the region's former president Carles Puigdemont. The hearing could have consequences for who leads the secessionist camp's campaign for December regional elections: the judges will decide whether to start an all-out investigation that could take years, and will also determine whether those called to testify should go to jail pending the investigation. This comes amid increasing signs of a shuffling for power within the pro-independence camp that could ultimately see Puigdemont sidelined - perhaps by someone with a less confrontational view of Catalonia's future status.

The Westminster sexual harassment scandal has claimed its first scalp with the resignation of Defence Secretary Michael Fallon, who already apologised for touching a radio presenter's knee in 2002 but who in his resignation statement referred to unspecified past conduct which fell "below the high standards" required for the job. Prime Minister Theresa May, who will announce his replacement today, thanked him for the example he has set with his decision. The question in Westminster circles now is: who next?

MARKETS AT 0755 GMT The U.S. Federal Reserve’s policymakers did little to upset this week’s latest record-breaking surge in world stock markets late on Wednesday as markets await the expected appointment later today of centrist Fed Governor Jerome Powell as the next chair of the central bank from February – a move seen as largely neutral for Fed monetary policy and markets at large. As Rabobank pointed out last night, the FOMC statement showed the "Fed on autopilot" while awaiting its new leader – a December rate rise is still a near certainty but there’s little clarity beyond "gradual" tightening after that. Concern about details of U.S. tax-cut plan moving through Congress today was cause for some caution, but while the dollar and Treasury yields were a touch lower – and the 2-10-year yield curve was at its flattest since 2007 - the S&P500 reached another record high. Similarly, the Bank of England is unlikely to ruffle too many stock market feathers with its well-flagged interest rate rise later on Thursday, its first in a decade. Sterling has been nudging up all week in anticipation, but key to the move will be the signalling of Governor Mark Carney on whether this is largely "one and done" for now as the economy splutters before Brexit or the beginning of a series to shore up the pound and drag inflation back to target. The pound was slightly higher first thing against the dollar, but off a touch against the euro.

Back on this week’s heavy earnings slate, Facebook (NasdaqGS: FB - news) stock was down about 1 percent in after-hours trading last night even after the social media giant posted a 50 percent increase in third-quarter revenues – showing some tiredness in the relentless tech rally as we await Apple (NasdaqGS: AAPL - news) results later. European shares were set to come off their two-year highs on Thursday. Results from banks Credit Suisse (IOB: 0QP5.IL - news) and ING confirmed the strong performance of the sector, which investors have warmed to this year as a play on Europe’s return to growth. Both beat expectations for third-quarter profit. Shell’s estimate-beating Q3 earnings, with a 50 percent rise in net profit, added to the positive news around the sector after BP on Tuesday announced a share buyback. Energy sector stocks have been among the weakest in Europe in terms of earnings beats this quarter. Brent crude held firm overnight above $60 per barrel. With (Other OTC: WWTH - news) nearly half of European companies having reported for the third quarter, industrial, financial and tech sectors stand out as the best-performing, according to Thomson Reuters (Dusseldorf: TOC.DU - news) data. Overall 66 percent of companies in the MSCI Europe have beat or met earnings expectations, underpinning regional indices’ gains.

Asia bourses were mixed overnight, with pullbacks from recent highs in Chinese and South Korean indices even as Japan’s Nikkei continued to outperform and ended in the black again. S&P futures are down about 0.2 percent first thing after Wednesday’s new records. Bitcoin continues to roar higher, with the cryptocurrency now over $6,900 – up more than 60 percent this quarter alone - and stalking $7,000 as markets eye this week’s announcement of a futures contract on the CME. The Czech crown was nursing its position as this year’s top-performing mainstream currency on Thursday ahead of what was expected to be a second hike in interest rates of the year. * Europe corp events: Swisscom (IOB: 0QKI.IL - news) , Swiss Re (LSE: 0QL6.L - news) , Credit Suisse, Sanofi (LSE: 0O59.L - news) , Shell (LSE: RDSB.L - news) , Carlsberg (LSE: 0AI3.L - news) , ING, Groupe Bruxelles Lambert (LSE: 0IN2.L - news) , DSM, Fresenius Medical Care (IOB: 0H9X.IL - news) , Danske, Dong Energy (LSE: 0RHE.L - news) , BT, Sampo (LSE: 0HAG.L - news) , Grifols (Madrid: 13138883.MA - news) , Ferrari (Xetra: 30092157.DE - news) , Fresenius (Swiss: FRE-EUR.SW - news) & Co, Coloplast (LSE: 0QBO.L - news) , Altice (Other OTC: ATSVF - news) , EDP Energias de Portugal, L’Oreal sales, AXA (Paris: FR0000120628 - news) sales, Smith & Nephew (Frankfurt: 502816 - news) trading, Morrisons

* European Oct manufacturing PMIs

* Germany Oct jobless

* Swiss Q4 consumer confidence

* Spain government bond auction

* Norges Bank financial stability report

* Czech National Bank policy decision

* Bank of England policy decision

* South Africa President Zuma answers questions in Parliament

* US Q3 earnings: Apple, Starbucks (Hanover: SRB.HA - news) , AIG, DowDuPont, Berkshire Hathaway, Discovery, Apache, Cigna, ICE, Chesapeake, PG&E, Ralph Lauren, etc

* US Q3 labour costs, productivity, weekly jobless claims

* NY Fed chief speaks in NYC (Editing by Larry King)