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

Rocky Swift

U.S. President Donald Trump's assertion that his latest

tariff deadline was "firm, but not 100% firm" was all Asian

share markets needed to stage a weak rally.

A July 9 date to secure trade deals with the United States

was reset to August 1, and even as 14 nations received letters

about tariff hikes on their goods, Trump's words left plenty of

time and wiggle room for negotiation.

Since Trump's unveiling of his sweeping "Liberation Day"

tariffs on April 2, each additional policy change has obeyed the

economic maxim of "diminishing marginal returns" in terms of

market reaction.

Still, 25% duties on goods from Japan and South Korea,

America's second- and third-largest trade partners in Asia, are

still a hefty burden. More letters are expected to be doled out

to other countries this week, keeping tariffs on the front

pages. For the time being, a sense of deja vu is keeping market

moves muted.

The European Union is not among those expected to get a

letter, EU sources familiar with the matter told Reuters on

Monday.

The EU still aims to reach a trade deal by Wednesday after

European Commission President Ursula von der Leyen and Trump had

a "good exchange," a commission spokesperson said.

Since April, the Trump administration has put together just

two, thinly sketched out trade agreements, with Britain and

Vietnam, and a fragile trade truce with China.

The U.S. dollar has been one of the biggest casualties from

the tariff turmoil, but it bounced back strongly on Monday and

held gains in Asia. Strength in the greenback against Japan's

yen and the South Korean won added a tailwind to their major

share indexes on Tuesday.

Equity futures are indicating a down day broadly for Europe

, whereas the U.S. market is poised for a flat

open.

But on the bright side, Goldman Sachs raised its return

forecasts for the S&P 500, citing expectations for U.S. interest

rate cuts and continued fundamental strength of major large-cap

stocks.

Key developments that could influence markets on Tuesday:

- Germany trade data for May

- Reopening of 5-year government debt auction in Germany

- Reopening of 24-year government debt auction in the United

Kingdom

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(Editing by Jacqueline Wong)