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

Wayne Cole.

It's been a bumper day for crypto fans after President

Donald Trump took to social media to announce a proposed reserve

of digital assets would include bitcoin, ether,

XRP, solana and cardano.

Bitcoin is up around 10% while ether jumped 13% before

easing back a touch as details of how the fund would work are

not clear yet and, presumably, will be outlined at Friday's

White House Crypto Summit.

Analysts are wondering exactly how the reserve will be

funded given the government has $36 trillion of debt, so

borrowing to buy crypto would seem a tough sell. Some have

suggested the government could use the crypto seized in criminal

cases in recent years, though that would only be a paper

transfer rather than actual new demand.

Also uncertain is whether Trump's 25% tariffs on Mexico and

Canada will go ahead on Tuesday, along with an extra 10% on

China. U.S. Commerce Secretary Lutnick said on Sunday tariffs on

Canada and Mexico would go into effect on Tuesday, but that

Trump would determine whether to stick with the planned 25%

level, suggesting it was not a done deal.

There's also been suggestions Trump might soften the blow if

Mexico and Canada agreed to place their own tariffs on Chinese

imports and/or the levies might be delayed until April 1 when a

study on trade is due to be finalised.

The stakes are all the greater as recent U.S. economic data

has surprised on the downside, leading the much-watched Atlanta

Fed GDPNow tracker to swing to -1.5% from +2.3%. Tariffs are

essentially a tax on U.S. consumers and analysts assume they

would hurt consumption at a time when the States is not looking

so exceptional anymore.

Just the threat of tariffs saw imports surge in January

lifting the U.S. trade deficit to easily its highest on record.

Normally that would imply a large drag on GDP from net exports,

though analysts said much of the jump in imports could have been

non-monetary gold which would not be counted in GDP.

Leaving aside the statistical quirks, markets are in no mood

for more weak data and a miss on the ISM forecast of 50.5 later

today would likely boost bonds at the expense of equities.

Markets already have 73 basis points of Fed cuts priced in by

January next year, when just a few weeks ago investors had

thought one quarter-point cut might be a stretch.

It all makes payrolls on Friday even more pivotal,

especially as Fed Chair Powell is speaking a few hours after the

data is released.

Beijing's possible response to tariffs, should they go

ahead, is also an unknown. The National People's Congress meets

on Wednesday and is expected to announce 2 trillion yuan to 3

trillion yuan ($274 billion-$412 billion) in new stimulus, and

possibly reprisals against any U.S. action.

Key developments that could influence markets on Monday:

- EU flash CPI for February; European, UK and US PMI data.

U.S. ISM survey for February.

- Speeches by Chair of the ECB Supervisory Board Claudia

Maria Buch and Fed Reserve Bank of St. Louis President Alberto

Musalem.

($1 = 7.2876 Chinese yuan)