Morning Bid: Chaotic US trade shifts leave markets wary

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

Markets in Britain will likely return from the long weekend with a bang on Tuesday after Donald Trump's backflip over his threatened 50% tariff on the European Union, although worries about his erratic policy shifts could make the lift short-lived.

FTSE futures were up sharply in Asia and Wall Street futures similarly pointed to a strong open, after the cash market was closed for a holiday in the previous session.

Asian stocks retreated on Tuesday, however, suggesting that investors remain hesitant.

The U.S. president's latest U-turn on EU tariffs reinforces how unpredictable his trade policies can be and undermines already fragile investor confidence in the U.S. economy.

The temporary trade reprieve did little to help the dollar, which remained stuck near its lowest in a month on Tuesday and was set for a fifth monthly decline against a basket of major currencies. That would mark its longest losing streak since 2017.

There is little on the data calendar on Tuesday, leaving investors focused on events later in the week, including Nvidia's earnings.

The AI bellwether is expected to report a 65.9% jump in first-quarter revenue on Wednesday, and Wall Street will be watching closely for clues on the impact of tighter U.S. export curbs on its AI chip sales to China.

Sources told Reuters that Nvidia will launch a new artificial intelligence chipset for China at a significantly lower price than its recently restricted H20 model and plans to start mass production as early as June.

Also on deck this week are speeches by Federal Reserve policymakers, alongside Friday's U.S. core PCE price index data, which could offer clues on the rate outlook.

A two-day annual conference hosted by the Bank of Japan and an affiliated think-tank kicked off on Tuesday, with the gathering of global central bankers in Tokyo set to focus on two uncomfortable realities: flagging economic growth and sticky inflation.

Key developments that could influence markets on Tuesday:

- 2025 BOJ-IMES conference in Tokyo

- Bitcoin 2025 conference in Las Vegas

- French preliminary inflation (May)

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(By Rae Wee; Editing by Edmund Klamann)