1/STATE OF THE MARKET

U.S. President Donald Trump is due to give his first formal "State of the Union" address on Tuesday and markets will be listening very carefully having seen his tax cut plans fuel a renewed surge in stocks this year, but the dollar thumped by trade and currency war nerves.

Historically, the stock market reaction has been mixed to such speeches. On average the S&P 500 has dipped 0.05 percent the day after, if you go back to 1965 when Lyndon Johnson gave the first televised evening State of the Union address.

Trump is not your average president though. The 1.37 percent S&P jump on March 1 last year after his Congress address - it isn't called State of the Union in the first year of a presidency - was the second largest after the 1.51 percent rise that followed George W. Bush's January 29, 1991 message.

The largest one-day drop meanwhile was after Bill Clinton's final effort in 2000 when it fell 2.75 percent. The average S&P move after Barack Obama's addresses was -0.61 percent. For George W. Bush it was -0.06 percent and for Clinton it was -0.15 percent.

*WALL STREET WEEK AHEAD - State of Union more likely to raise eyebrows than market

* Trump raises infrastructure investment plan to $1.7 trillion

*GLOBAL MARKETS-Dollar slides on U.S. Mnuchin remarks, booming Europe

(Graphic: U.S. Stock Market moves after State of the Union Addresses - http://tmsnrt.rs/2DAllZF)

2/GOLDILOCKS VS THE BEARS

This is a 'Goldilocks' period for world markets. Everything is just right - the global economy is booming, company profits are rising, the central bank stimulus taps are still open and U.S. tax cuts are about to kick in. Wall Street and world stocks are hitting record highs on a near daily basis.

But the porridge may be getting too hot and the bears are circling. Equity fund inflows this week hit a record $33.2 billion, according to BAML, and investor bullishness is reaching extreme levels. U.S. stocks are way more expensive than their European and Japanese peers, on a price/earnings ratio measure, and their most expensive since 2002. The warning signs are flashing red.

Next week brings a corporate earnings deluge on both sides of the Atlantic – with the big U.S. tech giants Apple, Amazon, Microsoft and Facebook all reporting. Even the bulls would agree that a correction is due. Will the bears get it next week?

*GLOBAL MARKETS-World stocks party like it's '99, dollar wilts again

*COLUMN-Goldilocks conditions may be beginning to fray:

*COLUMN-World markets lap up Mnuchin's dollar view:

(Graphic: Bull-bear monitor - http://reut.rs/2Ecl9AV)

3/RUSSIAN ROULETTE

Investors are anxiously awaiting U.S. Treasury publications due out next week that could detail ways of expanding sanctions against Russia, possibly to include Russian government debt.

Foreign investors currently hold around 32 percent of rouble-denominated Russian treasury bonds, lured by their lucrative yields and the fact the economy is picking up in line with oil prices.

Ratings agency Moody's also raised Russia's sovereign outlook to positive on Thursday, citing growing evidence of institutional strength and economic and fiscal resilience.

The rouble has rallied to near nine-month highs and Moscow shares are hitting all-time peaks, but Russian assets would be vulnerable if the U.S. sanctions on Russian rouble debt seem likely. Conversely, if the reports are a non-event, a relief rally could follow.

* U.S. hits Russian deputy minister and energy firms with sanctions

* Moody's lifts Russian sovereign outlook to positive

* EXPLAINER-Moscow, markets ready for possible fresh U.S. sanctions

(Graphic: Russian rouble-denominated debt - http://reut.rs/2DDcXbA

4/HIGH AND PMI-GHTY

A blizzard of global PMI and inflation data next week should show just how hot the temperature of the world economy is right now.

Next week’s Asia data includes Korean exports and inflation and Chinese PMIs which could give a good idea just how long the export momentum can be sustained against the backdrop of a dollar that just keeps getting cheaper.

Asian exports have so far been driving overall growth owing to a synchronised revival in global demand, a healthy upturn in the tech cycle and a recovery in commodity prices. In Europe, a big one to watch will be German GDP and inflation figures which if they remain strong could push the European Central Bank another step closer to ending its mass stimulus programme.

*UPDATE 1-Japan finmin says major nations agree not to target FX levels –

*UPDATE 5-Asia protests at U.S. solar, washer tariffs, fears more to come –

(Graphic: Asian currency real effective rates and exports - http://reut.rs/2E7p8hT)

5/SHOUTIN' AND YELLEN

Are we in a new global currency war or a trade war or both?

Janet Yellen holds her final meeting as head of the Federal Reserve next Wednesday with the dollar on its weakest run since 2010-2011 when the Fed was printing money hand over fist.

Now, though, the United States is firing a series of volleys over world trade agreements to explicitly protect U.S. industries – just as the Trump administration has been promising over its first year in power.

Tuesday's State of Union speech on Tuesday is expected to put trade at the top of this year's agenda. Last year, he scuppered TPP and now he is pushing to rethink and possibly walk away from NAFTA as well as setting in motion two major investigations, one into China’s intellectual property practices and another into steel tariffs.

This week the administration also slapped 30 percent tariffs on washing machines and solar panels to show it was prepared to put words into action. What's more, there's widespread concern in Europe the tax reforms themselves breach world trade rules on fair competition between European multinationals and U.S. counterparts. And speculation is rife the IP and steel investigations are now in and will form the basis for more action.

Yet the biggest market mover was Treasury Secretary Mnuchin cheerleading the dollar's already accelerating decline, implying to the foreign exchanges at least that the U.S. was happy to use the currency to add pressure on its overseas trading partners. The euro, sterling, yen and yuan all surged. Yellen might be quietly happy she's handing over to successor Jerome Powell.

*COLUMN-World markets lap up Mnuchin's dollar view:

*Trump warns Davos on unfair trade, says U.S. "open for business"

*U.S. has not moved an inch during the NAFTA talks, say sources

*South Korea hits back at U.S. tariffs with WTO challenge

(Graphic: President Trump's comments on the U.S. dollar - http://reut.rs/2E8OX1a)

(Additional reporting by Alden Bentley in New York, Claire Milhench and Jamie McGeever in London and Vidya Ranganathan in Singapore; Editing by Matthew Mpoke Bigg)