MORNING BID EUROPE- At last - some Greek relief

* A look at the day ahead from European Economics and Politics Editor Mark John and Deputy EMEA markets editor Sujata Rao-Coverley. The views expressed are their own.

LONDON, June 22 (Reuters) - Greece will be able to borrow from financial markets again when it quits its bailout programme in August after euro zone finance ministers agreed in the early hours of this morning to some initial debt relief and an extra cash injection to see it on its way. This is a major landmark in the country's move out of the abyss into which it landed as the sovereign debt crisis struck. The IMF welcomed last night's deal but has pointedly expressed reservations regarding Greece's future, raising questions about whether it could sustain its debt mountain in the long term.

There was a dramatic new twist in Romania's politics yesterday as a court sentenced the head of its ruling Social Democrat party, Liviu Dragnea, to three and a half years in prison for graft-related offences. Anti-corruption campaigners immediately hailed the verdict as a victory for the fight against the sort corrupt practices that still dog Romania's upper echelons of power. Dragnea himself has repeatedly denied all wrongdoing and will appeal. In the meantime, calls are growing for him to bow out of politics. Party leaders are rallying behind him, calling the court ruling part of a political witch hunt against him.

Wrangling over Europe's migration policy will continue today after Italy flatly rejected proposals that would have seen thousands of refugees coming back its way from Germany. EU President Donald Tusk is due to meet Hungarian Prime Minister Viktor Orban, a day after Orban confirmed that the Visegrad 4 group of central European countries confirmed they would have nothing to do with a "mini summit" in Brussels this weekend aimed at securing some kind of consensus on the matter.

MARKETS AT 0655 GMT

Trade fears seem to have well and truly kicked in, putting world shares on track for their biggest weekly loss since March and Chinese stocks have suffered their worst week since early Feb. Wall Street hasn’t escaped, with the Dow Jones closing yesterday at three week lows after a heavy toll on industrials stocks and stocks such as Caterpillar (LSE: 0Q18.L - news) losing more than 2 percent. And if you thought tech was safe, have a look at Amazon which dropped one percent after a court ruling allowed states to collect sales tax. Whether or not the trade spat will impact growth remains to be seen but the signs already are not good after yesterday’s profits warning from Daimler (IOB: 0NXX.IL - news) and an underwhelming Philly Fed manufacturing index in the United (Shenzhen: 000925.SZ - news) States. This morning’s action isn’t looking too bright either, as Asian shares hit six month lows and Chinese Shenzen stocks were at one-year lows. However, there are some signs of stabilization, with safe havens down, European stocks set for a firmer open and Wall Street futures also pointing north. U.S. yields are up marginally today but 10 bps off the 3 percent level touched last Wednesday and German yields inched up too. In Europe, Italian yields remain elevated after a 30 bps blowout on 2-yr yields on Thursday when two Eurosceptic lawmakers were appointed to important parliamentary committees. One of those, Claudio Borghi, is strongly in favour of so-called mini-BOTs, which can be considered effectively a parallel currency. Two-year yields are just below the one-percent mark. Good news on the Greek front with debt relief – Greek yields have fallen to four-week lows. Today, two important events on the radar. First (Other OTC: FSTC - news) , it’s PMI time – Japanese flash PMIs showed the first monthly decline in export orders since Aug 2016. In the euro zone French composite PMIs have ticked higher but manufacturing PMI is at a 16-month low. After a five-month long decline in Euro zone manufacturing PMIs, many people reckon June will be another month of weakness. There are also Markit PMIs in the U.S. - these have been robust but again a recent soft patch in exports, investment orders and consumption is leading many to forecast a weaker number. (Note (Stockholm: NOTE.ST - news) also that earlier today Japanese data showed core inflation refusing to budge higher despite five years of stimulus) The other event is the OPEC meeting – Brent crude is up 1.4 percent amid discord between oil producers on whether to raise output by one million barrels per day or not -- Iran opposes this which means a smaller output rise may be agreed. And the trade war issue is penetrating energy markets too – if Beijing goes ahead with a 25 percent tariff on U.S. crude, Chinese refiners may need to seek supplies. (Editing by Toby Chopra)