April 7 (Reuters) - A look at the day ahead in European

and global markets from Wayne Cole

Another day, another rout in Asian markets as President

Trump shows no sign of backing away from his tariff plans

despite the bonfire of wealth engulfing equity markets.

Investors had thought the spectre of trillions of dollars

lost would make Trump reconsider, or at least shake his aides,

but he seems to feel this harsh medicine will help in the long

run. Billionaire fund manager Bill Ackman, who endorsed Trump's

run for President, seemed to think otherwise, saying the tariffs

were an "economic nuclear winter" for the world.

The chill was certainly felt in Asia where the Nikkei shed

another 6% and Chinese blue chips almost 7%, despite talk that

Beijing would come to the rescue with stimulus steps.

Poor Taiwan returned from a break with losses of almost 10%

as Trump's sky-high levies threaten the supply chains that so

much of the world's business has come to rely on. Taiwan's

policymakers acted to curb short selling and circuit breakers

were tripped in a host of markets.

Dealers were increasingly concerned the markets' losses

would force investors to dump profitable assets just to cover

their margin calls, leading to a self-fuelling fire sale.

JPMorgan now sees a 60% chance of a U.S. recession and Fed

rate cuts from June to next January, leaving the funds rate

around 3%. Futures markets were also moving that way, with the

December Fed funds contract up an astonishing 30 basis points at

one stage this morning, before paring that back to 16 ticks.

Markets even imply a 50-50 chance the Fed could ease as

early as May, despite Chair Powell's reiteration last week that

the central bank was in no hurry to move.

His reticence is understandable given how tariffs are set to

lift the price of everything from cars to food. It's likely too

early for the U.S. March consumer price report this week to show

the impact, but that won't last for long.

Trump has said many countries were looking to do deals to

ease the tariff pain. Problem is, the "reciprocal" U.S. rates

chosen were much, much higher than the levies actually imposed

by most other nations, making it hard for them to offer deals

"beautiful" enough to satisfy Trump.

China seems ready for the fight, in part because it sees a

chance to become the trade partner you can trust, replacing the

U.S. There could also be more hints of EU reprisals when the

region's trade ministers meet later on Monday.

All of this is happening just as the U.S. earnings season is

due to start with major banks on Friday, and it will be a brave

CEO who expresses anything but caution about the outlook for

profits and sales.

Key developments that could influence markets on Monday:

- EU retail sales, Sentix investor confidence, German

industrial output

- Appearances by ECB board member Piero Cipollone and Fed

Governor Kugler