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MORNING BID EUROPE-Headline fatigue

Nov 22 (Reuters) - With 2019 entering its final stretch, the question for investors is whether to stay or go. Stay in equities or book the profits and bow out? Trade war flip-flops, political noise in the U.K. and USA, economic data that swings between hope and despair - today brings all that.

Recent negative headlines on the trade war front slammed world shares off 22 month highs and Wall Street from record peaks. MSCI’s global index is set to break a six-week winning streak. The mood seems a bit flat today, possibly a wait-and-see with European shares opening a bit weaker, Asian markets barely recovering from Thursday’s 1.4% loss and Chinese blue chips shedding 1%. Currency markets everywhere too are more or less unmoved, though the dollar is set for a weekly loss after three weeks of rising and the Chinese yuan has suffered its worst week in two months.

But today, there's not much of a response to China’s suggestion for another round of face-to-face talks or to media reports that the U.S. may delay the planned tariffs even if a phase 1 deal is not reached by Dec 15. Is this headline fatigue? Remember also that China is likely to be irked if President Trump signs into law two bills passed by Congress in support of Hong Kong protesters.

On the economic front, Japan’s data underscored the difficulties policymakers face — inflation was a meagre 0.4% in October despite a VAT hike and factory activity shrank a seventh straight month in November, advance PMIs showed. Unsurprising perhaps after last week’s data showed the economy had ground to a standstill in Q3. The question is whether Europe and the US will do better. Investors will be hoping that October’s stabilisation in German/Euro area PMIs and in Germany’s ZEW indicator wasn’t a one-off and today’s figures will confirm that growth has indeed troughed out.

But the fear on everyone’s mind is that services and labour markets get infected by the manufacturing slowdown -- they will be mindful that Germany’s composite employment index fell below 50 for the first time in six years last month and the OECD forecast euro zone growth at just 1.2%.

On bond markets in the euro zone, a couple of interesting things to watch for – Italian bonds which are headed for their first weekly yield rise in four weeks – investors are likely spooked by the squabbles over reforms to the eureo zone bailout fund, the ESM, with some in Italy raising concerns that the country would be forced to restructure its huge debt pile should it ever request ESM assistance. The other issue is an unexplained spike in the euro money market rate ESTR which rose to minus 0.511 yesterday (has eased back since)

European bourses are opening just slightly off 3-weeks lows but without enough news from the trade war front to impulse any clear directional trend. Not much corporate action left in terms of earnings either except for a 33% fall in the profits of Nationwide Building Society. Also Edenred’s admission of a malaware infection will be closely watched.

There is however some M&A action, with Reuters reporting that Unilever and Henkel were considering bidding for beauty brands from U.S. cosmetics maker Coty. Also Vivendi might be ready to offer an olive branch by selling part of its stake in Mediaset at a loss in an attempt to reach a deal to end years of bitter legal disputes with the Italian broadcaster. After yesterday's fat finger moving its share price, there's a report in the Spanish press that Euronext has hired SocGen and Lazard for a possible bidding war for the Madrid bourse. In Germany a consortium seeking to buy wholesaler Metro's <B4B.DE Real> chain has beefed up its offer for the hypermarkets.

In emerging markets, China mainland blue chips tumbled by more than 1%, putting the index on track for a second week in the red. Yet a bounce back in Hong Kong which rose 0.7% after a 1.5% tumble on Thursday held up the MSCI’s emerging market benchmark, which hovered unchanged on the day but was poised for a 0.4% fall in a second week in the red.

Most emerging currencies are also taking a breather, but the index is also on track for weekly declines. China’s yuan trades a touch softer and is on track for a 0.4% weekly decline – its worst week in two months. South Africa’s rand gains 0.2% after the central bank keeps interest rates unchanged as expected at 6.5% on Thursday and ahead of a S&P credit rating review. Israel’s shekel strengthened 0.2%, grinding back towards a 20-month high hit on Thursday after Prime Minister Netanyahu said he would not resign despite being charged with bribery, fraud and breach of trust in a corruption scandal. The Bank of Israel is due to deliver its first rate cut since 2015 on Monday. (Reporting by Sujata Rao, Editing by William Maclean)