GLOBAL MARKETS-Markets brace for Trump tariffs, US inflation data

Updates after European markets open

By Iain Withers and Ankur Banerjee

LONDON/SINGAPORE, Jan 31 (Reuters) - Global stocks steadied on Friday after a volatile week due to the emergence of a low-cost Chinese artificial intelligence model, while investors braced for the threat of U.S. tariffs on Canada and Mexico as early as Saturday.

Relatively strong sales forecasts from Apple overnight helped support market sentiment. European stocks .STOXX were up 0.4% in early trading, while Wall Street futures were up between 0.4 and 0.7%. EScv1, NQc1

Technology stocks across the globe stumbled badly on Monday as investors reckoned with Chinese company DeepSeek's AI model, with shares of high-profile tech names such as Nvidia , and Oracle plunging.

Tech stocks have since recouped some of their losses, with the CEOs of Microsoft and Meta defending their massive spending to stay competitive in the AI field.

The looming threat from U.S. President Donald Trump of 25% tariffs on Mexico and Canada is also firmly in investors' sights and has helped lift the dollar, push gold prices to a record high and pressured the Mexican peso and Canadian dollar. FRX/ GOL/ MXN=, CAD=

"There is big market complacency in terms of the manner that the market could digest the tariffs," said Michael Nizard, multi-asset chief investment officer at Edmond de Rothschild.

Markets are underpricing the potential risks of Trump's tariffs and Europe could well be next in his sights, he added.

U.S. inflation data due later on Friday will also be scrutinised for clues as to the future path for interest rates, after the Federal Reserve held rates steady on Wednesday.

Data on Thursday showed U.S. economic growth slowed in the fourth quarter, but remained robust enough for investors to expect the Fed to lower rates only gradually this year.

The U.S. dollar index was last up 0.1% on the day and was on track for a 0.7% weekly gain. =USD

The European Central Bank cut interest rates on Thursday as expected, while the market is betting the Bank of England will follow suit next week. The euro and sterling were both down slightly on Friday. EUR=, GBP=

In Japan, the yen JPY=EBS was last at 154.71 per dollar. Expectations of further rate increases from the BOJ this year have recently boosted the yen. Deputy Governor Ryozo Himino said on Thursday the BOJ will continue to raise rates if the economy and prices move in line with the central bank's forecasts.

In commodities, gold XAU= rose to hit a record $2,800.99 and was last flat on the day. GOL/

Brent crude futures LCOc1 slipped 0.3% to $76.7 a barrel. U.S. crude futures CLc1 dipped 0.2% to $72.62 a barrel. O/R

Stock markets in mainland China, Hong Kong and Taiwan remained closed for the Lunar New Year. The MSCI broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.1%, but was still on course for about a 1% gain this month.