GRAPHIC-Take Five: The big Trump tariff countdown

Jan 31 (Reuters) -

President Donald Trump's tariff deadline is looming large, the U.S. reports jobs data and markets are gauging the new AI landscape ahead of major tech firms reporting.

The Bank of England has an interest rate decision to make, and lenders in Europe also publish their results.

Here's your guide to the week ahead in global markets from Kevin Buckland in Tokyo, Saqib Ahmed and Lewis Krauskopf in New York, and Tommy Wilkes and Amanda Cooper in London.

1/T DAY

From bond investors and currency traders to Fed officials and foreign powers - everybody wants to know how serious Trump is about tariffs, and how severe they will be.

Saturday could be the best indication so far, when Trump has promised to slap neighbours Canada and Mexico with 25% levies until both illegal migrants and the drug fentanyl stop crossing their borders. In scope for tariffs are a combined trillion dollars of U.S.-bound shipments a year.

Canada is hoping to head off any action, launching a fentanyl crackdown, while Mexico scored the biggest fentanyl bust in its history in December.

An arguably more interesting case is China. It's anyone's guess if mooted 10% tariffs are also on the cards for Saturday. The White House reiterated it's still seriously considering this, despite Trump's comments he didn't really want to use tariffs with China following a "friendly" phone call with Xi Jinping.

2/SHOULD I STAY OR SHOULD I GO?

The monthly U.S. jobs report due on Feb. 7 comes as investors assess the prospects for further interest rate cuts and how dramatic new Trump administration policies could reshape the labour market.

December's blowout jobs report raised doubts about whether the Fed would have room to ease monetary policy further and sent Treasury yields shooting higher. Encouraging inflation data did calm market fears, but a hot January jobs report could change all that.

Fed Chair Jerome Powell said he is in no rush to cut rates again until inflation and jobs data make it appropriate.

The big unknown though is Trump's labour market agenda, including an immigration crackdown and plans to slash the federal workforce, with the White House offering 2 million federal employees financial incentives to quit.

3/TECH-TONIC SHIFTS

Investors have long speculated about what might eventually slow the AI-investment steamroller and now have a new perspective to consider: The emergence of China AI sensation DeepSeek, which has overturned assumptions about the computing power and investment needed to create state-of-the-art models.

This shift pummelled Nvidia's (NVDA) stock, inflicting a record loss in market value. But DeepSeek is also challenging the broader dominance of U.S. technology, raising questions about the competitive advantages of the top seven tech stocks, dubbed the Magnificent Seven.

With upcoming earnings reports from Mag 7 members Alphabet on Tuesday and Amazon (AMZN) on Thursday, investors will have the chance to determine whether recent AI market volatility is a warning of future challenges or an opportunity to reinvest in this rapidly growing sector.

4/IN FOR A SQUEEZE

European bank earnings pick up pace in the week ahead, with French lenders BNP Paribas, Societe Generale and Credit Agricole, Switzerland's UBS and Spain's Santander all reporting fourth-quarter numbers.

Most lenders are expected to have still wrung enough extra cash out of higher interest rates - helped by soaring investment banking revenues - to boost their profits and keep a two-year-long share price rally rolling on. Investors will listen for any hints that a recent burst of deal-making has further to run.

Still, challenges loom. Falling interest rates mean pressure on the difference between what banks earn on loans and what they pay on deposits, and there is economic weakness at home just as the U.S. economy powers ahead.

Germany's Deutsche Bank gave some cause for concern when it reported a sharp drop in profits and ditched a key goal on costs, sending its shares lower.

5/DECISION TIME

The Bank of England meets on Thursday to set interest rates. Markets aren't quite fully pricing in a quarter-point cut, but economists seem to think that is the likely outcome.

UK data is weakening - multiple measures of employment show cracks appearing in the labour market, and consumer spending unexpectedly shrank in the key holiday shopping period. Growth flatlined in the third quarter of 2024 and the BoE expects the same in the last one.

Several banks see the British economy struggling to expand by even 1% this year, in spite of finance minister Rachel Reeves' plans to revitalise growth.

And there's the matter of the bond market turmoil earlier this month, which pushed the government's 10-year borrowing costs to their highest since 2008. Gilt yields have since retreated, but remain uncomfortably above 4.5% - more than any G10 economy bar New Zealand.

(Graphics credits to Sumanta Sen, Vineet Sachdev, Prinz Magtulis and Kripa Jayaram Compiled by Karin Strohecker Editing by Frances Kerry)