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

Kevin Buckland

Calmer heads appear to be prevailing after China's DeepSeek

triggered a sell-off in AI-related shares, with a relief rally

overnight rippling into the few Asian markets not closed for

Lunar New Year holidays.

Investors are converting to the idea that the startup's

cheap AI assistant won't pull the rug out from under valuations

for Nvidia and its ilk, just as they prepare to assess the

parade of earnings that begin today from the so-called "Mag 7"

tech megacaps.

Facebook owner Meta Platforms ( META ), Microsoft ( MSFT )

and Tesla are on deck for today, and Apple ( AAPL )

tomorrow.

Japan's Nikkei was up about half a percent at the

midday break, on track to snap a three-day losing run.

Australia's stock benchmark gained 0.9%, with additional

momentum from a mild inflation print that boosted the odds for a

rate cut when the Reserve Bank meets next month.

Asia's equity markets were understandably cautious,

however, considering the marquee Wall Street earnings ahead this

week and a barrage of central bank policy decisions that include

the Fed today and the ECB tomorrow.

Added to that is fogginess over how severe U.S.

President Donald Trump's looming tariff announcements might be.

After Trump's comments late last week that he'd prefer not

to slap Beijing with additional levies, following a "friendly"

call with Xi Jinping, the White House reaffirmed that duties on

Canada and Mexico are coming this Saturday, while Chinese

tariffs are still under consideration.

It makes for a bit of a tense Lunar New Year celebration,

with mainland markets on holiday until the middle of next week.

The dollar has been on a yo-yo string since Trump's

inauguration, reacting mainly to shifting tariff expectations.

The dollar index is up about 0.4% so far this week but

down 2% from the two-year peak reached on Jan. 13.

Traders expect the Fed to stand pat on monetary policy

today, even with Trump demanding lower rates. Market pricing

doesn't factor in a quarter-point reduction until June, followed

by one more by year-end.

In contrast, the ECB is widely expected to cut tomorrow,

followed by rapid-fire reductions in March, June and possibly

October.

Europe is also in Trump's tariff cross-hairs, so Saturday's

announcement on Canada and Mexico could bring unwelcome news for

the bloc as well.

Data due today include German GfK consumer sentiment

surveys, Spanish and Belgian GDP, Italian business and consumer

confidence, and Portugal's jobless rate.

Sweden also has GDP figures, and the Riksbank is widely

tipped to cut rates by a quarter point.

Later in the day, the Bank of Canada is considered almost

certain to cut rates by a quarter point as well.

The Bank of England doesn't announce a policy update until

Feb. 6 but Governor Andrew Bailey will be giving evidence on the

Financial Stability Report to a parliamentary committee.

Key developments that could influence markets on Wednesday:

-US earnings from Meta, Microsoft ( MSFT ), Tesla

-Policy decisions from U.S. Fed, Riksbank, Bank of Canada

-BoE Governor Bailey testifies to parliamentary committee