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

Kevin Buckland

It was a nervy start to the week for markets, led by an

uncharacteristically steep decline for Wall Street futures early

in the Asian day.

U.S. President Donald Trump seems to be at the centre of

investor worries, sidestepping a question in a Fox News

interview on Sunday about whether his trade tariffs could

trigger a U.S. recession.

As City Index analyst Matt Simpson put it, that's as good as

a yes as far as markets are concerned.

The R-word has been making the rounds among traders and

analysts. A Reuters poll found 91% of economists view the odds

of a downturn to have increased under Trump's rapidly shifting

trade policies.

By around midday in Asia though, the pessimism was less

pronounced.

Down more than 1% at one point, S&P 500 futures had

pared that decline by half.

Japan's Nikkei had flipped from a small loss to be

up 0.6%, escaping the drag from a strengthening of the

safe-haven yen. Taiwan's benchmark was off just 0.2% compared

with 0.8% earlier.

The exception was China where weekend data showed

deflationary force continues to build, giving policymakers more

to think about at the week-long National People's Congress that

runs through Tuesday.

Hong Kong's Hang Seng tumbled more than 2% and

mainland Chinese blue chips sagged 0.8%.

A big reason for the turnaround in many markets was that

they had already sunk so low, with the S&P 500 touching a nearly

six-month trough on Friday before bouncing back a bit.

The Nikkei also closed out last week at a six-month nadir.

It's telling that Japan's best performers on Monday were

beaten-down chip-sector shares.

Macro-economic misfires for the U.S. and China have been to

the benefit of Europe though, where investors are positioning

for a seismic shift from Germany's suddenly looser purse

strings.

Pan-European STOXX 50 futures are up 0.8% in very

early trading and the euro is clinging close to Friday's

four-month peak.

Europe's data calendar is overall light today, headlined by

German trade and industrial output figures for January.

The Eurogroup meets in Brussels, with the participation of

European Central Bank President Christine Lagarde among others.

Key developments that could influence markets on Monday:

* Eurogroup meeting in Brussels

* Germany industrial output, trade figures

* Italy producer prices

* Sweden GDP

* Norway, Denmark CPIs