Dec 2 (Reuters) - A look at the day ahead in European

and global markets from Wayne Cole

The dollar is making the early running on Monday, retaking

some of last week's losses helped in part by rare words of

support from U.S. President-elect Donald Trump.

While 100% tariffs look rather unlikely, the latest comments

marked a change from the Trump of old who openly touted a weaker

dollar as a way to fix the U.S. trade deficit. The market took

them as suggesting he will not be a source of pressure on the

currency.

The Chinese yuan certainly took it badly, touching a

three-month low on the dollar.

The dollar is also up around 0.5% on the yen and above

150.50 yen per dollar, overshadowing recently more hawkish

musings from Bank of Japan Governor Kazuo Ueda who said the next

interest rate hikes were "nearing in the sense that economic

data are on track".

Ueda's comments, combined with data showing Japanese

business investment rising at a healthy 8.1% clip in the third

quarter, encouraged markets to price in a 65% chance the BOJ

will hike by a quarter point to 0.5% at its policy meeting on

Dec. 18-19.

That is virtually the same market probability that the

Federal Reserve will cut rates by a quarter point at its meeting

on Dec. 18, though much will depend on what this week's ISM

surveys and payrolls data show.

U.S. jobs are expected to have rebounded by 195,000 in

November, though the forecast range of 160,000 to 270,000

suggests the risk of an upside surprise. JPMorgan, for instance,

is tipping 270,000, with the end of hurricanes and strikes

adding almost 90,000 to payrolls. Yet, they also expect the

jobless rate to tick up to 4.2% and nearer the Fed dot plot of

4.4%, likely leaving the door open to a December easing.

For the ECB, a cut of 25 bps on Dec. 12 is seen as the

absolute minimum and the market implies a 21% chance of 50 bps.

Investors have priced 1.6% as the floor for ECB rates, compared

with 3.75% for the Fed.

French bonds will need all the rate love they can get after

France's far right National Rally raised the risk of a no

confidence vote this week that could topple Prime Minister

Michel Barnier. Whatever happens, budget repair seems unlikely

and the deficit could head to 6% of GDP, perhaps making it more

expensive for France to borrow than for Greece.

Oh, and it's worth keeping an eye on the Russian rouble

after its near collapse last week as the authorities seemed to

condone its decline, maybe figuring a devaluation was worth it

to fatten their export earnings from commodities priced in

dollars.

Key developments that could influence markets on Monday:

- UK housing prices for Nov; EU unemployment; euro zone,

German, UK and French PMIs

- Appearances by ECB President Christine Lagarde, BoE

Director Lee Foulger, Riksbank First Deputy Governor Anna

Breman, Fed Governor Christopher Waller and Fed NY President

John Williams