MORNING BID EUROPE-A mood test for Germany AG

* 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, Oct (HKSE: 3366-OL.HK - news) 13 (Reuters) - One of the week's biggest numbers is out at 0900 GMT with the ZEW report on sentiment in the German economy in October. This could give a first glimpse of perceptions on whether the VW emissions scandal is hurting the wider economy and comes after last week's data signaling a drop in exports and weak industrial orders, largely down to a slowdown in China and other emerging markets.

It (Other OTC: ITGL - news) could still be bluff-calling but Portugal's opposition leader Antonio Costa is looking increasingly serious about wanting to try and form a government with Communist and hard-left parties after the inconclusive election earlier this month. Major policy hurdles remain to such a coalition and Costa's own mandate is weak after the disappointing performance of his party, yet this is starting to look like a real alternative to a more austerity-minded minority government under incumbent Prime Minister Pedro Passos Coelho. Portuguese shares fell sharply on Monday on the prospect of a prolonged bout of uncertainty and of a left-leaning government reversing efforts to curb the deficit. There could still be a long way to run in this, however; Costa and Passos Coelho are due for a new round of talks today after last week's encounter proved fruitless.

The Dutch Safety Board is issuing long-awaited findings at 1215 GMT investigation into the crash of a Malaysian passenger plane over eastern Ukraine. It is expected to say it was downed by a Russian-made Buk missile but not who was responsible for firing it.

Ireland (Other OTC: IRLD - news) 's finance minister will effectively kick off the government's re-election campaign on Tuesday when he presents his 2016 budget, with a booming economy meaning he can offer to cut taxes and spend more on services. There had been speculation that Prime Minister Enda Kenny would seek to benefit from any post-budget bounce by bringing forward the election from next year, but he pretty much ruled that out at the weekend.

MARKETS (at 0645 GMT)

If China and commodity markets are the heart of this year's market anxiety, then the past 24 hours have been a reality check. A 20 percent drop in Chinese imports in the year through September was worse than expected and speaks loudly to the demand shock being transmitted around the world from the slowdown there. A near 5 percent drop in Brent crude prices overnight, partly on rising U.S (Other OTC: UBGXF - news) . stockpiles, showed how commodities continue to reverberate. While a near 4 percent drop in Chinese exports was marginally better than forecast, it was cold comfort for those looking for some turnaround. The only two positives were that the Sept trade surplus came in far bigger than forecast and will flatter Q3 GDP estimates, while drip-fed PBOC monetary easing helps to shore up markets to some degree. A rise in Chinese car sales last month for the first time in six helped. As a result, early losses in Shanghai were reversed to leave it closing flat. Tokyo, HK, Seoul and Bangkok were all in the red, however, with Jakarta underperforming with losses of almost 3 percent. European stocks are called lower, as are Wall St futures at this early stage, with Intel (Swiss: INTC.SW - news) and JPMorgan (LSE: JPIU.L - news) releasing Q3 earnings later. Treasury yields and the dollar continue to ebb on what can only be described as equivocal Fedspeak -- hawks, like Stanley Fischer, still hold out the chance of a rate hike this year but doves like Fed governor Lael Brainard and Chicago Fed chief Charles Evans now point clearly to 2016. Euro/dollar is nudging higher toward $1.14

The rebound in emerging market stocks stutters to a halt on Tuesday as oil takes a tumble and China data remains uncertain, though there is no such blip for currencies as the dollar continues to wilt.

EVENTS

German Oct ZEW, final Sept inflation

UK Sept inflation

Ireland presents 2016 budget

Italy bond auction

Sweden Sept inflation, jobless

US Q3 earnings: Intel, JPM (Editing by Sonya Hepinstall)