MORNING BID EUROPE-World gets face-time with Trump

* 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, May 19 (Reuters) - Donald Trump is so keen on sleeping in his own bed that even during his gruelling presidential campaign schedule he would fly back home to New (KOSDAQ: 160550.KQ - news) York. That won't be an option as he sets off for Saudi Arabia later today for a nine-day trip to the Middle East and Europe that even some of his own officials worry is too long and tries to cover too much ground.

With (Other OTC: WWTH - news) stops in Riyadh, Jerusalem and the Vatican, Trump is hoping to send "a message of unity" to followers of three of the world's greatest religions - and one presumably in sharp contrast to his efforts to limit travel from several Muslim-majority countries. There will also be face-time with world leaders at next week's G7 and NATO summits set to cover everything from fighting terrorism and climate change to debating the economy and world trade.

The Trump team also fervently hopes the trip will divert attention away from the furore over his handling of allegations of Russian meddling in the 2016 election. This could be an eventful excursion.

Emmanuel Macron's first trip outside Europe as president is, in contrast, a quick dash to spend a few hours with French troops stationed fighting Islamist militants in northern Mali after France's 2013 intervention. Macron put counter-terrorism at the top of his security priorities during his election campaign: The reality is dawning on Paris that, with security in the region if anything worse than when it first intervened, its troops will remain for the foreseeable future.

As anti-austerity protesters hurled petrol bombs outside, Greek lawmakers last night approved pension cuts and tax hikes sought by the country's lenders in return for financial aid. Prime Minister Alexis Tsipras, sagging in opinion polls and taunted by rivals as the "best advertisement for austerity in Europe", immediately called on eurozone finance ministers meeting on Monday to grant the country further debt relief. It remains to be seen exactly what kind of response he gets: Lenders have agreed in principle to debt restructuring but not on details.

MARKETS AT 0655 GMT

All’s quiet – at least, so far - across world markets on the last day of the most eventful week this year.

Earlier in the week, it looked like nothing would derail stocks from chalking up new record high after new record high against a backdrop of historically low volatility. The S&P, Nasdaq (Frankfurt: 813516 - news) , German DAX and MSCI (Frankfurt: 3HM.F - news) world stock index all hit their highest levels ever.

Then the Trump turmoil in Washington finally burst the dam, triggering the biggest rise in volatility and fall in stocks this year. The dollar and U.S. yield curve slumped back to levels not seen since the U.S. election, and market probability of the Fed raising rates next month tumbled to below 60 percent from over 90 percent last week.

By many measures, the “Trump bump” or “reflation trade” of recent months is well and truly over, not least because there is serious doubt he will be able to push through his growth-boosting agenda of tax cuts, deregulation and infrastructure spending. Impeachment is a risk too. Having said all that, perhaps this is just what markets needed – a shakeout.

Corporate profit growth remains solid, the economy is still doing OK, and according to Citi, this year is shaping up to be the first since 2004 that equity funds in all major regions across the world will attract inflows. So investors aren’t going to ground. Not yet, anyway.

The main focus in emerging markets is the unfolding corruption scandal in Brazil that threatens to engulf president Michel Temer. Brazilian markets cratered on Thursday, stocks down nearly 9 percent and the real down 8 percent, That was the currency’s biggest fall since the 1999 devaluation and crisis. As European trading gets underway, the euro is holding above $1.11 and on course for its best week in almost a year (+1.8 pct), European stocks open slightly lower, oil is up 0.5 pct, and major bond yields are steady.

European shares are seen up slightly after closing off lows in a previous session as they try to recover from their worst day in eight months. That came on Wednesday after U.S. political turmoil fuelled worries over Trump's stimulus plans, denting risk appetite and dragging the STOXX 600 down from 21 month highs.

With futures last up 0.1-0.3 percent, the pan-European benchmark index remains on track to end the week down at least 1 percent, its biggest weekly drop more than six months. European earnings have been surprisingly strong, but after the latest company updates the forecast for first-quarter growth has slowed to 19.4 percent from above 20 percent previously. Around 80 percent of the companies have reported so far with 65 percent beating expectations and 8 percent meeting them. Meanwhile, European funds continued to see an inflow of US$1.1bn, which brings the 8 weeks cumulative inflow to $14.6bn, a Citi analyst said.

Possible stock moving headlines: T-Mobile, which is 64-percent controlled by Deutsche Telekom (IOB: 0MPH.IL - news) , sees benefits in merger with Sprint -CFO; Danone eyes 2020 operating margin of above 16 pct; VW CEO says successor likely to come from within - Handelsblatt; Novartis to cut around 500 jobs in Switzerland, add 350; Italy's A2A (EUREX: 928195.EX - news) hires Rothschild to sell stake in Montenegro's EPCG –sources; traders said K+S (Swiss: SDF-EUR.SW - news) could be supported after Platow-Brief reported that the German potash miner plans a reserved capital increase, possibly to CVC (Taiwan OTC: 4744.TWO - news) . It said the price could be of around 26 euros a shares; Swiss food company Aryzta is seen up after announcing the appointment of a new CEO. (Editing by Andrew Heavens)