MORNING BID EUROPE-Sleepless in Berlin

* 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 17 (Reuters) - Pulling into government such diverse groups as the left-leaning Greens and Bavaria's social conservatives was never going to be easy and after 15 hours of negotiations in Berlin going into the night, talks have had to be adjourned till noon at least. The biggest hurdle to Angela Merkel's three-way coalition remains the migration issue, with notable differences over how flexible to be in allowing family members to join refugees already in Germany after the mass arrivals of the past couple of years. No one wants to see early elections, from which the hard-right AfD is widely expected to gain, so ultimately the mainstream parties may start compromising - although Merkel's Bavarian sister party, the CSU, has much to lose politically by being seen to go soft on the migrant issue. Talks might well last into the weekend, with some participants seeing Sunday as the new deadline to agree.

European leaders meeting in the Swedish city of Gothenburg today will proclaim a set of 20 "social rights" in a bid to make the EU more appealing to voters and counter eurosceptic sentiment across the bloc. The pact - which will not be directly enforceable by the EU - encompasses principles ranging from equal access to jobs, to fair working conditions and wages and social protection and unemployment benefits and training. This is a response of sorts to the widespread perception, unfair or otherwise, that Brussels is not doing enough to combat inequality. It remains to be seen whether it makes a difference. On the margins of the meeting, there will be much focus on the encounter between British PM Theresa May and EU Council President Donald Tusk and whether any signs emerge that Britain is willing to raise its offer on the EU divorce bill - currently the main sticking point in the Brexit negotiations.

Reuters' latest poll on the eurozone shows economists believe the single currency area will mark its best year in a decade and maintain solid growth well into 2018, with respondees noting that the risk was that their forecasts might not be optimistic enough. Euro zone economic growth has been surprisingly robust this year, outpacing both the United States and Britain simultaneously for the first time since the 2007-08 financial crisis, and also one of the most synchronous upturns across the euro zone economies. Such a high degree of confidence in above-average performance for the euro zone has never been captured in Reuters polls stretching back since the financial crisis, and indeed has been a rarity ever since the euro was launched in 1999. MARKETS AT 0755 GMT Global picture – Another up day for world shares, putting paid to fears that the recent market wobble was the start of "The Big One". World stock markets are set for a second week of losses, but many people will have used the mini-shakeout to add risk, judging from what participants at our annual summit told us this week. That aside, U.S. tax reform appeared to take a step forward and data yesterday was fair, helping Wall Street to jump off three-week lows while Nasdaq (Frankfurt: 813516 - news) yet again scored a record-high close. The risk-on mood extended to junk debt markets and emerging shares. The dollar has hit the skids, down 0.3 percent, heading for its biggest weekly fall since early September. It was weakened by a Wall Street Journal report suggesting investigators into possible Russian interference into U.S. presidential election had subpoenaed President Donald Trump’s election campaign for documents. The U.S. yield curve remains in pancake mode, though the gap between two-year and 10-year yields widened after shrinking to its narrowest in 10 years, as the two-year yields hit a nine-year high following this week’s robust economic data. German yields have seen the biggest weekly drop in three weeks as the stock market wobble pushed cash towards safe-haven assets. But a benign euro zone backdrop has also helped compress yields on other euro zone debt, with French yield premia over Germany falling this week to the lowest in 2 1/2 years. The euro meanwhile rose 0.2 percent to gain 1.2 percent on the week, staying close to one-month highs. Currency traders will be watching Germany today after talks to form a coalition missed a deadline. Also in focus are Messrs Draghi and Weidmann (ECB and Bundesbank chiefs respectively), both of whom are scheduled to speak. After enjoying a bounce on Thursday from a five-day selling streak, European shares were set to open mixed, with euro zone index futures fractionally up and those on the FTSE falling 0.3 percent on further strength in the pound. In spite of the strong rebound seen in the previous session, the pan-European STOXX 600 index is on track to suffer its second week of losses in a row, down a combined 2.8 percent. On the company earnings front: French media conglomerate Vivendi (Swiss: VIV.SW - news) released third quarter earnings that missed analyst estimates, showing how the media market remains tough. Vivendi (LSE: 0IIF.L - news) , however, affirmed its 2017 outlook revenue and EBITA. Europe's third-largest catering group, Elior (Paris: FR0013204435 - news) , cut its profit guidance for the current fiscal year, citing the impact of Hurricane Irma. In the UK, builder Carillion (Frankfurt: 924047 - news) issued its third profit warning this year and said it would breach its financial covenant. With (Other OTC: WWTH - news) 86 percent of companies having reported already, 50 percent of MSCI (Frankfurt: 3HM.F - news) euro zone companies have beaten forecasts, slightly below 52 percent for broader Europe and 72 percent for Wall Street, a shortfall that’s being blamed on the euro strength. Earnings growth is running at 10.7 percent in dollar terms for Q3, with energy, basic materials and financials the main drivers of earnings beats. In other company news and stock movers: Roche haemophilia drug wins FDA nod, with a warning; VW taps Brazil growth with new model to challenge Fiat (Hanover: FIA1.HA - news) , GM; ProSieben attracts bids for stake in digital ops, sources say; Telecom Italia CEO says no need to own all of fixed network; JCDecaux (LSE: 0MGO.L - news) sees China becoming its number one market in 2018; Stockmann puts Helsinki department store up as collateral in refinancing Emerging stocks: the MSCI index is up 0.6 percent on the day thanks to some solid gains in major Asian indexes such as Taiwan (Taiwan OTC: 6549.TWO - news) and Hong Kong, where tech heavyweight Tencent (HKSE: 0700-OL.HK - news) jumped nearly 3 percent. MSCI is also on track for a 0.4 percent rise on the week. Emerging currencies: despite a weak dollar, many currencies fail to make headway, and Turkey's lira edged 0.2 percent lower and is on track for a similar fall over the week, on reports that President Tayyip Erdogan pledge to "deal with the interest rate lobby" at a meeting with policymakers next week. The lira has weakened nine out of 10 past weeks. South Africa's rand was also 0.2 percent lower, but on track for 1.3 percent gains since Monday, snapping a four-week losing streak. India's rupee strengthened 0.5 percent after Moody's upgraded its rating on the country's sovereign bonds for the first time in nearly 14 years. Bitcoin: Will it crack $8000? It hit a record high of $7997 earlier in the day but has since pulled back a bit. Upcoming events, data on Friday: NZ Oct trade German Nov Ifo index Italy Sept industrial orders/sales Poland Oct jobless US Nov flash PMI Mexico Q3 current account Moody’s reviews sovereign credit rating of Saudi Africa, Estonia. S&P reviews South Africa

(Editing by Larry King)