MORNING BID EUROPE-Revolt brews in no-deal Brexit showdown

* 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, Feb 22 (Reuters) - After some suggestions early in the day that Theresa May could be ready to send a tweaked Brexit deal back to parliament for approval next week, Downing Street finished Thursday by suggesting that did not look likely. If no fresh vote is forthcoming, that puts the focus squarely back on whether an attempt by some lawmakers next week to pass an amendment ruling out a no-deal Brexit will succeed this time. The Guardian believes May is facing what it calls the most serious cabinet revolt of her premiership, with up to 25 members of her government prepared to back the amendment that would require her to extend the Article 50 deadline for leaving beyond March 29. That would mean in turn she would have to sack them. How significant a moment this is in the whole process is hard to judge: clearly, a mass cabinet sacking and a delay to Brexit are pretty important events in themselves, but would no-deal then actually be off the table? That would depend on a number of variables, including the length of the delay itself: A short one of weeks or a couple of months would merely kick the can a bit further down the road.

The suspense over whether the United States and China can put their seven-month-old trade war behind them has slightly obscured the fact that Europe also needs to sort out what terms its future relationship with Washington will be on. Donald Trump has insisted America deserves better terms of trade with the EU, whose negotiators have in turn said they can discuss industrial goods including autos but not farm products. Trade ministers from the various EU capitals meet today to fine-tune what stance the European Commission should take ahead of a possible start of negotiations proper.

Moldova is one of those countries which by its geography has long felt the tug of both east and west; this Sunday, elections there are expected to produce a hung parliament balanced between pro-Western and pro-Russian forces. The EU forged a deal on closer trade and political ties with the tiny ex-Soviet republic in 2014 and showered it with aid but it has become increasingly critical of Chisinau's track record on reforms and combating rife corruption. The election may not in itself create waves but it is a test of the soft power both Brussels and Moscow seek to wield in their neighbourhoods.

MARKETS AT 0755 GMT A late rally in Shanghai stocks enlivened otherwise glum overnight trading on world markets, with optimism about an imminent trade deal between U.S. and Chinese negotiators in Washington this week the only obvious driving force behind gains of almost 2 percent in the last couple of hours the day there. Shanghai stocks ended up 1.9 percent and HK was up 0.4 percent, both outperforming other major Asia bourses that were mostly flat on Friday and also ahead of unchanged U.S. and European stock futures. With the deadline for U.S. tariff increases next Friday, the two sides in the trade talks have already sketched out memorandums of understanding on a range of issues – with the sticking points related to specific language on structural changes in China demanded by Washington and also on enforcement of the agreement. Chinese Vice Premier Liu He will meet with President Trump at the White House on Friday. Sources familiar with the negotiations told Reuters the MoUs would cover forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade. The two sides have reached consensus on how to alleviate the trade imbalances, according to Chinese government sources, and Washington and Beijing are looking at a 10-item list for that, including additional Chinese purchases of agricultural produce, energy and goods such as semiconductors. The weekly gain in the Chinese CSI300 was as much as 5.4 percent – it's best week in almost three years.

Elsewhere, Wall St ended in the red overnight amid a mix of downbeat economic readings – mostly in the capital goods orders and a manufacturing contraction in the Philadelphia Fed’s business index. The factory hit mirrors contractions in the European and Japanese manufacturing sectors this month. Currency and bond markets were quiet first, with European traders looking to a speech by European Central Bank chief Draghi later on Friday and Fitch’s review of Italy’s sovereign credit rating. Euro/dollar was a touch higher at $1.1344. U.S. Treasury yields, the dollar and benchmark oil prices were all little changed. Sterling was a fraction lower against the euro and dollar, with eyes on last-ditch talks between UK and the European Union on possible changes to the Brexit withdrawal agreement that could see the bill get through the UK parliament. EU Brexit negotiator Barnier said on Friday that he cannot rule out the possibility that Britain's EU withdrawal is pushed back – although it was not his decision.

On the European corporate front, results from car parts maker Valeo come amid serious concerns investors about the autos sector battling slowing car demand, more stringent EU emissions regulations, and the threat of tariffs on European car imports to the U.S. Valeo said 2018 profit fell in a "challenging year", but said 2019 sales will outperform auto production by a wider margin. Its shares were indicated down 2 percent. Dealmaking livened up the UK market: subprime lender Non-Standard Finance made an offer for its larger rival Provident Financial, and Canadian dairy firm Saputo announced it would acquire Dairy Crest for about $1.27 billion. Dairy Crest was expected to jump 10 percent on the deal, priced at 620 pence per share – a premium of about 11.7 percent to Thursday’s close. Provident Financial was seen rising 1-2 percent after the "reverse takeover" from Non-Standard Finance, traders said. * Europe corp events: Cellnex Telecom, Cembra Money, Edenred, Elekta, ISS, Italgas, Kingspan, Pearson, Sika, Sopra.

* Germany Q4 GDP, Feb Ifo business survey

* EZ Jan inflation

* European Central Bank chief Draghi speaks in Frankfurt; Bank of France chief and ECB policymaker Villeroy speaks in Lisbon. Bank of Spain chief and ECB policymaker Hernandez de Cos speaks in Madrid; Bank of Austria chief and ECB policymaker Nowotny speaks in Brussels

* Ireland to publish ‘no deal’ Brexit contingency legislation

* Belgium Fen leading indicator

* Turkey Feb manufacturing confidence

* US Q4 earnings: Athene Holding, AutoNation, Boise Cascade, Cheniere Energy, KBR, Magna

* Canada Feb retail sales

* New York Fed chief Williams and St Louis Fed chief Bullard speak in NYC

* Sovereign credit rating reviews – S&P: Iraq, Lithuania, Sweden, Switzerland, Tajikistan, Zambia/Moody’s: The Netherlands, Bosnia/Fitch: Italy, Hungary, Georgia

(Editing by Gareth Jones)