MORNING BID EUROPE-Retaliation and de-escalation

* 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, Nov 25 (Reuters) - U.N. Secretary-General Ban Ki-moon is leading calls for Turkey and Russia to de-escalate tensions after the downing of a Russian plane along the Turkish-Syrian border yesterday. Moscow, if only for national pride, will have to proceed with some form of retaliatory measures -- all eyes today will be on how far Vladimir Putin is prepared to go. The big question is whether he will jeopardise the Syria political process or swallow some of that pride and keep talking to all parties in the process.

Authorities in Belgium have generated much confusion over their handling of the security situation. Fears of an imminent Paris-style attack have prompted them to extend a maximum security alert in Brussels until next Monday and deploy extra police. But about half the stations on its metro system will reopen on Wednesday - along with city schools.

British finance minister and PM-hopeful George Osborne will pursue his goal of fixing the nation's public finances with a new set of spending cuts to be unveiled in his Autumn statement at 1230 GMT. The political calculation is that voters will take four more years of austerity on the chin and then be rewarded with income tax cuts before the next election. That is quite a gamble with some services already cut to the quick. The health service, schools and foreign aid will again win reprieves, with the losers being the police and local government (which provide services ranging from rubbish collection to old people's homes).

Pope Francis steps onto African soil for the first time on Wednesday to address the continent's fast-growing Catholic congregation. The Nov. 25-30 trip will test his ability to bridge fault-lines between Christians and Muslims: it starts in Kenya and Uganda, which have both seen Islamist militant attacks, before he travels to the Central African Republic, a nation torn by Muslim-Christian strife.

MARKETS (AT 0745 GMT)

Brent crude's bounce back above $46 and the steadying of metals prices has been the most significant impact from Turkey's downing of a Russian jet on Tuesday, with moves in other assets relatively modest and yesterday's losses in European stocks expected to be partly reversed today.

The firmer commodities world and easier dollar also meant Wall St and Asia stock markets largely brushed off the clash as calls for de-escalation reverberated. The retreat in U.S (Other OTC: UBGXF - news) . Treasury yields and the dollar, started in part by the former's 'safe haven' reaction to the jet incident, was sustained after news of an unexpected drop in U.S. consumer confidence. The S&P500, heading into the Thanksgiving weekend, ended just in the black. Shanghai stocks also ended almost 1 percent higher earlier too, led by a rally in small-cap tech stocks. Other Asian bourses were down only slightly. A big upward revision to Singapore's Q3 GDP brightened the broader economic picture.

Another edgy day of trading is likely later, however. Not only are volumes thinning due to the NY holiday, but the Russia jet story is another in a series of jarring incidents from Paris to Brussels to Mali and beyond that will at least make intra-day trading very jumpy for the foreseeable future. With (Other OTC: WWTH - news) eyes on UK finance minister George Osborne's latest spending plans later today, construction stocks will be eyed as a boost to homebuilding has been trailed in advance of the speech. Sterling is still smarting from BoE chief Carney's dovish tilt on UK rates on Tuesday.

Turkish lira extends losses to a new one-week low on fears for the economy in the wake of souring relations with Russia and investors' disappointment with the new cabinet, though emerging stocks and Asian currencies were broader firmer as the dollar continued to retreat from recent eight-month peaks.

The rouble is flat, shrugging off oil's rise to two-week highs as fears again rise for Russia's fragile rapprochement with the West, although Moscow stocks are 1 percent higher and 10-year yields have eased slightly. Turkish stocks likely to open weaker again, eyes on tourism stocks which are heavily reliant on Russian trade. Monitoring CDS for both countries. The Hungarian forint and Polish zloty are at two-week lows against the euro.

Upcoming events/data/ themes

* European corp events: LafargeHolcim (Other OTC: HCMLY - news) earnings, Thomas cook (Xetra: A0MR3W - news) earnings, Daily Mail earnings,

* France, Sweden Nov consumer confidence

* Italy Sept industrial orders, Sept retail sales

* German 10-year bund auction

* Sweden government bond auction

* Riksbank publishes Financial Stability Report

* Portugal Oct jobless

* Brazil rate decision, no change expected

* US flash Nov services PMI, Umich sentiment; Oct (HKSE: 3366-OL.HK - news) durable goods orders, new home sales, personal income/spending

* UK finance minister Osborne presents Autumn budget statement and spending review

* US Treasury auctions 7-year notes, 2-year FRNs (Editing by Hugh Lawson)