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

Markets have taken the one-month delay in tariffs on Canada and Mexico as a signal that everything's negotiable. Even for China.

Canada's Justin Trudeau and Mexico's Claudia Sheinbaum got on the phone to Donald Trump on Monday and told him they had agreed to bolster border enforcement efforts.

Sheinbaum won plaudits from political analysts for her approach and investors seemed to relax - sort of.

Hong Kong shares touched a two-month high, led by electric vehicle makers, as investors turned more hopeful that China - hit by a 10% tariff - will end up cutting a deal. [MKTS/GLOB]

The euro rebounded from a two-year low around $1.01 back to $1.03 in one of its biggest round-trips in recent years as fears of an imminent trade war seemed to subside.

Crypto traders bought the big dip in bitcoin and ether.

Yet, the wild ride has left so many things unclear. As J.P. Morgan's Michael Feroli points out, it has increased policy uncertainty in a way that is hard to reverse.

European stock futures rose only 0.1% in Asia.

Focus in the session may also fall on numerous results announcements spanning financials such as Amundi, UBS and BNP Paribas, as well as on businesses with exposure to tariffs such as Ferrari, Infineon and Diageo.

Google parent Alphabet reports earnings after market close in New York.

On China, Trump has said that tariffs "are going to go substantially higher" unless it stops "sending us fentanyl".

China says it has already cracked down on the drug trade and that fentanyl - a synthetic drug that is 50 times stronger than heroin - is a problem for the U.S. to sort out.

Trump's press secretary has said he will speak with Chinese President Xi Jinping in the next couple of days.

The outcome of that conversation, as well as how Beijing handles its dollar exchange rate when Chinese markets return from a week-long holiday on Wednesday, will be in focus.

Most expect the yuan's trading band fixing to be fairly steady. After Monday's rollercoaster, the offshore yuan - at around 7.31 per dollar - is still technically within the bounds of where the onshore trading band closed last week. [CNY/]

It is not clear what sort of deal Europe could cut to avoid tariffs that Trump has threatened.

Key developments that could influence markets on Tuesday:

- Earnings: Amundi, BNP Paribas, Dassault Systemes, Diageo, Ferrari, Infineon Technologies, UBS, Alphabet

(Reporting by Tom Westbrook; Editing by Jacqueline Wong)