A look at the day ahead in European and global markets from Tom

Westbrook

Markets have taken the one-month delay in tariffs on Canada

and Mexico as a signal that everything's negotiable. Even for

China.

Canada's Justin Trudeau and Mexico's Claudia Sheinbaum got

on the phone to Donald Trump on Monday and told him they had

agreed to bolster border enforcement efforts.

Sheinbaum won plaudits from political analysts for her

approach and investors seemed to relax - sort of.

Hong Kong shares touched a two-month high, led by

electric vehicle makers, as investors turned more hopeful that

China - hit by a 10% tariff - will end up cutting a deal.

The euro rebounded from a two-year low around

$1.01 back to $1.03 in one of its biggest round-trips in recent

years as fears of an imminent trade war seemed to subside.

Crypto traders bought the big dip in bitcoin and

ether.

Yet, the wild ride has left so many things unclear. As J.P.

Morgan's Michael Feroli points out, it has increased policy

uncertainty in a way that is hard to reverse.

European stock futures rose only 0.1% in Asia.

Focus in the session may also fall on numerous results

announcements spanning financials such as Amundi, UBS

and BNP Paribas, as well as on businesses

with exposure to tariffs such as Ferrari ( RACE ), Infineon

and Diageo ( DEO ).

Google parent Alphabet reports earnings after

market close in New York.

On China, Trump has said that tariffs "are going to go

substantially higher" unless it stops "sending us fentanyl".

China says it has already cracked down on the drug trade and

that fentanyl - a synthetic drug that is 50 times stronger than

heroin - is a problem for the U.S. to sort out.

Trump's press secretary has said he will speak with Chinese

President Xi Jinping in the next couple of days.

The outcome of that conversation, as well as how Beijing

handles its dollar exchange rate when Chinese markets return

from a week-long holiday on Wednesday, will be in focus.

Most expect the yuan's trading band fixing to be fairly

steady. After Monday's rollercoaster, the offshore yuan - at

around 7.31 per dollar - is still technically within the bounds

of where the onshore trading band closed last week.

It is not clear what sort of deal Europe could cut to avoid

tariffs that Trump has threatened.

Key developments that could influence markets on Tuesday:

- Earnings: Amundi, BNP Paribas, Dassault Systemes, Diageo ( DEO ),

Ferrari ( RACE ), Infineon Technologies, UBS, Alphabet