MORNING BID EUROPE-Greece's long path back to normality?

* A look at the day ahead from European Economics and Politics Editor Mark John and EMEA Chief Markets Correspondent Nigel Stephenson. The views expressed are their own.

LONDON, Sept 21 (Reuters) - Greek premier Alexis Tsipras is determined to finally draw a line over his country's long-running financial woes and start weaning itself off the rescue funds it has drawn on since 2010.

Sources have told Reuters that Athens is looking at a swap of 20 existing small bond issues for four or five new ones: that would be a first step towards launching a couple of bigger debt issues over the next 12 months and ultimately, Tsipras hopes, resuming normal financial operations.

It has been a bit of a French slow-motion car crash but finally Marine Le Pen (Other OTC: PENC - news) 's right-hand man, Florian Philippot, has announced he is quitting the party.

The schism was created largely by Philippot's insistence that the National Front campaign to quit the euro - one of the policies believed to have hurt Le Pen in the May election where she faced Emmanuel Macron.

The move raises the prospect of a split in the far-right's ranks and the question of what exactly will now become of the rump FN, for so long a hugely visible feature in French politics.

Some have noted that Germany's broadcasters are forgetting even to mention Sunday's election on their main TV bulletins, such is the expectation that Angela Merkel will romp home after a fairly uneventful campaign.

Not so fast, Merkel herself declared last night, warning supporters against "unbelievable" complacency and insisting that anything can still happen. Germany needs a "clear path", she said, a reference to the fact it is wholly unclear who she will be able to govern with after the vote. MARKETS AT 0655 GMT

The dollar hit its strongest against the yen in two months after the U.S. Federal Reserve signalled it expected one more rise in interest rates this year to make it three for 2017.

U.S. two-year Treasury yields hit their highest since November 2008 after the decision.

German Bund yields have followed Treasury yields higher on Thursday with the 10-year yield hitting its highest since early August.

The dollar was flat against its currency basket as trading got under way in Europe but the yen was still down 0.2 percent against the greenback. The euro and sterling were also marginally lower. Futures markets put the chances of a Fed hike in December at about 71 percent, according to CME Group (Kuala Lumpur: 7018.KL - news) ’s FedWatch tool.

European stocks were set for a strong open, following gains on Wall Street after the Fed’s rate signal and its announcement it would begin trimming its balance sheet in October.

Europe’s banks would be in particular focus as the biggest gainers from rising interest rates, after a tepid previous session.

Irish building materials firm CRH (EUREX: 558474.EX - news) said it would buy U.S. cement maker Ash Grove Cement, in order to expand into the U.S. market.

German reinsurer Hannover Re showed the first signs of strain from a series of natural disasters as it warned it may miss its 2017 profit target due to claims from Hurricane Maria and the earthquake in Mexico likely to stretch its budget to breaking point after losses from Tropical Storms Harvey and Irma. Insurer Talanx, Hannover’s majority stakeholder, also said it could miss targets.

Reuters’ report that Unicredit (EUREX: DE000A163206.EX - news) approached Commerzbank (Xetra: CBK100 - news) for a merger sent the Italian bank’s shares skidding in late trading on Wednesday, and analysts dissected the implications of such an approach, which Jefferies said should be “taken with a large pinch of salt” with consolidation among Southern European banks more likely in the short-term as cross-border deals bring additional regulatory complications.

In other company news and potential stock mover headlines:

Miner Hochschild on hunt for acquisitions – executive; Talanx (IOB: 0QA8.IL - news) warns may miss 2017 profit as natural disasters hit Hannover Re; Capita says trading in line, hunt for new CEO continues; Kier says confident of achieving double-digit profit growth in FY 18; IG Group's Q1 revenue jumps on expanding client base; Britain's Kier reports 3.5 pct rise in full-year profit.

The Fed outlook and firmer dollar are weighing on metals prices. Copper is down 1.2 percent at $6,442 a tonne and gold hit a three-week low. It was last down 0.2 percent at $1,297 an ounce. Oil fell on rising U.S. inventories and production. Brent crude is down 15 cents at $56.14.

Spain’s government bonds are showing little reaction to the central government’s efforts to prevent Catalonia’s banned independence referendum going ahead. Ten-year yields are up 4 basis points but the spread over Germany is steady at 100 bps.

Emerging equities retreated 0.25 percent and currencies were mainly weaker in the face of dollar strength after the US Federal Reserve announced it would shrink its balance sheet from October and signalled one more rate hike this year.

The South African rand slipped 0.2 percent ahead of a central bank meeting at which it is expected to cut rates by 25 basis point to 6.5 percent. Consumer inflation rose 4.8 percent year-on-year in August, but this was less than expected.

China’s yuan slipped 0.3 percent to a more than three-week low. China has hit back at criticism from the U.S. about its trade practices, defending its foreign investment policies. Washington has said China is a threat to the world’s trading system and is probing its practices.

The Turkish lira weakened around 0.4 percent to near one-month lows. President Tayyip Erdogan warned that an upcoming Kurdish independence referendum in northern Iraq on Sept. 25 could lead to fresh conflicts in the Middle East. Turkey has threatened to impose sanctions over the vote.

The Indian rupee fell to its lowest in more than two months, weakening 0.5 percent and South Korea’s won lost 0.2 percent. The Mexican peso also slipped 0.4 percent as the death toll from this week’s powerful earthquake rose to 237.

The Russian rouble bucked the trend, firming 0.1 percent with the central bank saying it would provide financial support to B&N Bank and Rost Bank. The regulator will become the main investor in B&N Bank and its affiliates. It added there would be no requirement for a bail in.

* Europe corp events: IG Group results, Capita (LSE: CPI.L - news) results, Manchester United (NYSE: MANU - news) results, Smiths Group (Frankfurt: QS2A.F - news)

* Swiss Aug trade data

* ECB chief Draghi speaks in Frankfurt on financial stability

* ECB general council meeting

* Spain auctions government bonds

* Norway central bank policy decision, press conference and monetary report

* SAfrica Reserve Bank policy decision

* Riksbank policy meeting minutes

* Turkey Sept consumer confidence

* US Sept Philadelphia Fed index, weekly jobless claims

* Mexico July retail sales

* Argentina Q2 GDP (Editing by Jeremy Gaunt)