MORNING BID EUROPE-UK stimulus beckons as Fed meets

* 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, July 26 (Reuters) - Bank of England policymaker Martin Weale, who until now was resisting the case for looser policy, says he now sees the outlook differently after much weaker-than-expected British purchasing managers' data. Weale did not state explicitly if he would back a rate cut when the central bank announces its next policy decision on Aug. 4, but his comments in the Financial Times will add to speculation of a move. It comes amid estimates that Britain could borrow nearly 65 billion pounds more than planned in the next couple of years in a "reset" of government budget policy after last month's Brexit vote -- the first real rise in borrowing since 2010.

Comparisons with Japan, which according to the Nikkei newspaper could inject as much as 6 trillion yen ($57 billion) in direct outlays into the economy over the next few years, are already being made. Yet if austerity is indeed over, one of the big questions is where the stimulus will land -- via the quick expedient of tax cuts or the ultimately more effective but slower channel of public investment?

Confirmation that the Syrian refugee who blew himself up and wounded 15 others in southern Germany had pledged allegiance to Islamic State adds a troubling new dimension to the country's security concerns. The discovery in his room of bomb-making materials and laptop images of Islamic State propaganda are prompting questions about how many of the million-plus migrants and refugees welcomed in by Angela Merkel's open-door policy are dangerous. Federal Interior Minister Thomas de Maiziere said no decision would be made on changing asylum or immigration rules for now, but Bavaria's ruling conservatives are due to introduce measures today to strengthen police forces, in part by ensuring they have adequate equipment.

Turkish President Tayyip Erdogan promised in a German TV interview late on Monday to keep Turkey's promises to limit the flow of Middle East migrants into the European Union. The sting in the tail is that he accused the EU of failing to live up to its promises, for example in delivering sufficient aid to deal with the problem. While the European Union frets about Erdogan's post-coup crackdown on dissent, his stance shows how the bloc's and Turkey's interest remain intertwined.

MARKETS AT 0645 GMT

The jump in the yen overnight gives a clear picture of the extent of policy stimulus already priced into world markets. Reports emerged of that Japan's government was planning a direct fiscal stimulus of some $57 billion over the next three years, but doubts whether that's enough 'shock and awe' or that the BoJ would reciprocate with sufficient equivalent monetary easing - at least not direct monetization of that via 'helicopter money' - saw the yen surge more than 1 pct and the Nikkei225 index lose 1.5 pct. Either all that suggests markets are riding for a fall everywhere, or we really are in very confused territory indeed. As one HSBC economist in Asia remarked this morning: "Conversations with investors suggest that expectations are all over the place."

On the other side of coin, and the world, the Fed's two-day policy meeting gets under way later. No change there, but there's some trepidation an upgraded assessment of the economy may fuel speculation of a September rate build. Futures have already moved probabilities back up close to 20 pct yesterday, even though a backsliding oil price takes any pressure off the Fed to get hawkish all of a sudden. Brent crude sliced below $45 on Monday for the first time since early May - down almost 16 pct in 6 weeks - and there are concerns about poor Q3 global demand, the swollen glut and seasonal pressures could see a text of $40. Back in Brexit-land, Bank of England easing speculation was stoked by the hawkish MPC (KOSDAQ: 050540.KQ - news) member Martin Weale now backing immediate easing in August - while RBS (LSE: RBS.L - news) has told its business customers to prepare for them charging negative interest rates. Sterling is easier about $1.3080 as a result.

In equities, oil majors weighed on Wall St during a heavy earnings week that awaits Apple (NasdaqGS: AAPL - news) 's results later. The stock fell more than one percent after the bell last night as BGC cut its recommendation to 'sell'. Outside Japan, Asia bourses were more mixed - with Shanghai and HK up about 1 pct, while regional emerging markets slipped back. European stock futures are expected to rise at the open.

Upcoming events/data/ themes for market reports on Tuesday:

* Europe corp events: BP, Man Group (LSE: EMG.L - news) , STMicro, Provident Financial, GKN (LSE: GKN.L - news) , Telecom Italia (Other OTC: TIAJF - news) , CNH, Orange (LSE: 0OQV.L - news) , LVMH, Valeo (LSE: 0NR3.L - news) , Drax, Michelin (Paris: FR0000121261 - news) , Tyman (Other OTC: LPUSF - news)

* UK's BBA June mortgage approvals

* UK DM expected to sell syndicated 2065 gilt

* Italy's economy minister Padoan speaks in Rome

* Hungary rate decision

* Nigeria rate decision

* Turkey quarterly inflation report

* SAfrica finance minister Gordhan speech in Joburg

* US Q2 earnings: Apple, Caterpillar (NYSE: CAT - news) , Verizon (NYSE: VZ - news) , Eli Lilly, Starwood Hotels, Legg Mason (NYSE: LM - news)

* US July flash PMIs, Dallas and Richmond Fed indices, June home sales, May house prices

* Mexico June trade

* Brazil June current account

* US Treasury auctions 5-yr note (editing by John Stonestreet)