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

Stella Qiu

The markets got a jolt on Friday from what looked likely

to be a dull summer day, when U.S. President Donald Trump took

to the TV to inject fresh drama into his simmering trade wars

and disrupted Wall Street's recent upward drift to record highs.

Trump said tariff letters to Canada and Europe would go out

"today or tomorrow" and floated the idea that the blanket tariff

rates on other countries that do not get a letter could be set

at 15% or 20%, a step up from the current 10% baseline rate.

Soon afterwards he posted the letter to Canada on social

media, specifying that a 35% tariff rate would be imposed on all

Canadian goods from August 1.

Market nerves were soothed a bit, however, when an

administration official clarified that an exclusion was expected

for goods covered by the United States-Mexico-Canada Agreement.

Wall Street futures skidded 0.8% and EUROSTOXX 50 futures

dropped 0.7% before regaining some composure. They were

last down about 0.3%.

Currency markets also convulsed but, once the dust settled,

the dollar was up about 0.3% on the loonie and the euro

had slipped 0.2%.

The yen, for its part, has been steadily weakening as the

prospects dim for a U.S.-Japan trade deal. The dollar was up

0.6% on Friday at 147.12 yen and is headed for a

weekly gain of 1.7%, the biggest this year.

On the crosses, the yen is down for a seventh straight week

on the euro and hit a five-month low on the

Australian dollar.

With Trump now saying the EU will get a letter, too,

investors suspect trade talks between the two are not going very

well. EU officials had been saying they were aiming for a deal

before August 1.

The economic data calendars in Europe and the U.S. are

relatively light on Friday, leaving investors to gear up for

second-quarter U.S. corporate earnings next week to gauge the

impact of Trump's tariffs.

In an ominous sign of what may be to come, Uniqlo owner Fast

Retailing ( FRCOF ) warned that tariffs will have a significant

impact on its U.S. operation later this year, and plans to raise

prices to soften the blow. Its shares tumbled almost 7% in

Tokyo.

Key developments that could influence markets on Friday:

-- UK May monthly GDP

-- Canadian jobs numbers for June

-- Eurozone final CPI for June

-- Possible Trump letter on tariffs to the EU