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

Kevin Buckland

It's been building for a long time, but worries about the

destabilising and economically destructive potential of Donald

Trump's trade policies seem to have come to a head at the end of

the month, rippling across all asset classes.

Europe is feeling the effect of threatened 25% U.S. levies

with stocks sliding yesterday and futures pointing to more

losses today, while the euro has slipped to deeper two-week lows

against the dollar.

Big declines in Canada's currency show little sign of

abating as it marked a fresh 3 1/2-week low, with Trump

clarifying that 25% duties are still set for next week, after

earlier appearing to offer another one-month extension to the

deadline.

The market reaction in China to threats of an additional 10%

tariff has been more complicated, owing partly to the timing.

The powerful National People's Congress meets next week, and in

a gathering that was initially expected to yield little,

analysts now say more stimulus could be imminent.

The biggest currency casualties of Trump's China tariff

threats have been the Aussie and New Zealand dollars, which

often act as more liquid proxies for the yuan. The yuan itself

is bouncing off multi-week lows, with the PBOC setting a

slightly firmer official rate for the first time this week,

showing its intent to support the currency.

Hong Kong stocks slid some 1.7% on Friday but

mainland blue chips were off by a relatively paltry

0.5%. Compare those declines to the nearly 3% tumbles in Japan's

Nikkei and South Korea's Kospi.

The Tokyo bourse felt the additional weight from a strong

yen - the traditional safe haven was the only currency to be

meaningfully up against the dollar on Friday.

The dollar-yen pair also tends to track U.S. Treasury

yields, which sank to new two-week troughs as traders

contemplated the potential damage of a global trade war to

America's own economy, which is of late already showing signs of

vulnerability.

A key report is coming up later today in the form of the PCE

deflator, the Fed's preferred inflation gauge.

Traders have been steadily ramping up bets for a dovish Fed,

with the two quarter-point rate cuts that recently got priced

into the market now seen most likely for June and September.

Of course it's the ECB that kicks off the next round of

global central bank meetings with a policy decision next week,

and another quarter-point cut is widely expected.

What's less clear is what happens after that, with some

signs from policy makers that the pace of easing will slow.

There's a fair bit of economic data from Europe today,

including import prices, retail sales, jobs data and consumer

inflation figures just from Germany alone.

With European stock futures pointing firmly lower, tech will

bear close watching. Asian bourses are being buffeted by a

delayed selloff over Nvidia's ( NVDA ) earnings from earlier in

the week, which clearly did little to quell worries that

valuations have gotten unsustainably high, especially after the

emergence of China's ostensibly lower-cost AI competitor,

DeepSeek.

Also taking a beating are crypto bulls, with bitcoin

plunging below $80,000 briefly, down as much as 27% from the

record $109,071.86 reached on January 20.

With Trump focusing more on trade and immigration in his

first month in office, the biggest waves he's made in the crypto

world so far have been $Trump and $Melania meme coins.

Easier regulation and even a strategic crypto reserve may

still be coming, but clearly not yet.

Developments that could influence markets on Friday:

-US PCE price index

-Germany import prices, retail sales, unemployment rate, CPI

-France GDP, CPI

-UK Nationwide house prices

-Sweden GDP

(Editing by Muralikumar Anantharaman)