MORNING BID EUROPE-Merkel seeks path through post-Brexit jungle

* A look at the day ahead from Special Correspondent Europe Noah Barkin and EMEA Markets Editor Mike Dolan. The views expressed are their own.

LONDON, Aug 22 (Reuters) - A decade ago, after referendums in France and the Netherlands killed Europe's overly ambitious constitution, German Chancellor Angela Merkel helped forge agreement on a more modest pact, the Lisbon treaty, allowing the EU to save face and regain a semblance of forward momentum.

Can she do it again? Her bid to cobble together a convincing response to Brexit from a deeply divided EU-27 starts on Monday with her trip to the Italian island of Ventotene where she will meet with Italy's Matteo Renzi and France's Francois Hollande.

By the end of the week she will have met with 13 other European heads of state to prepare the groundwork for a Sept. 16 summit in Bratislava that is meant to inject new life into the battered bloc. The Italian site has symbolic significance - two Italian intellectuals held there during WW2 wrote an influential manifesto calling for the creation of a federal Europe in response to the surge in nationalism. But it will take more than symbols to get everyone on board and on message for Bratislava.

At the moment there is next to no consensus on how to tackle the big three challenges for Europe: immigration, security and a lacklustre economy that has left scores of its citizens jobless. These are the very same issues that helped drive Britain's shock vote in June to leave the EU. Forging common responses to them in the current environment - and at a time when elections loom in many of Europe's biggest countries - is a Herculean task which looks beyond the powers of a weakened Merkel and her not-so-merry partners.

GLOBAL MARKETS (at 0650 GMT)

After two quiet mid-August weeks in which the dollar ebbed lower and oil prices rebounded, there were some signs of a change of heart on Monday. Euro/dollar's pop above $1.13 coincided with Brent crude recapturing $50pb late last week, but both have been knocked off their respective perches already today.

Fed thinking clearly dominates greenback direction, but Fed VP Fischer on Sunday was intent on keeping a 2016 rate rise on the agenda as he spoke of a US economy near Fed targets and close to full employment - teeing up the big set-piece of the week this Friday as chair Yellen speaks at the annual Jackson Hole central bank conference on Friday. US interest rate futures remain equivocal about a rate rise this year, with the chances of a move by December now seen as 50-50 but more hawkish noises are helping the dollar get a firmer footing here.

Brent's bounce back above $50, meantime, was been helped by the dollar retreat and fresh talk of an OPEC output freeze at next month's meeting of top oil producers. The dollar bounce and some scepticism about the latter has seen it slip back on Monday. The bigger picture of relative economic stability since the Brexit vote has also helped risk markets more generally in recent weeks, with stock markets grinding out new highs.

Jackcon Hole speculation may see some of the air come out of those markets as a result. Wall St was broadly flat to lower on Friday, and S&P500 and European stock futures marked down slightly today. Shanghai, HK and other regional Asia stocks were lower earlier, with Japan's Nikkei outperforming on the easier yen.

Upcoming events/data/themes on Monday:

Japan Aug flash manufacturing PMI

* European corporate events: Kingspan earnings

* U.S (Other OTC: UBGXF - news) . sells 2-year notes (Editing by London desk)