GLOBAL MARKETS-Stocks slip, yen gains on Trump trade war, China deflationary woes

By Kevin Buckland

TOKYO, March 10 (Reuters) - Wall Street futures sank and the safe-haven yen and Swiss franc strengthened on Monday as building deflationary pressures in China added to growth worries from a lacklustre U.S. economy and an escalating global trade war.

U.S. S&P 500 stock futures EScv1 pointed 0.5% lower and Nasdaq futures NQc1 sagged 0.6% as of 0609 GMT.

Hong Kong's Hang Seng .HSI slumped 1.8%, and an index of mainland Chinese blue chips .CSI eased 0.7%.

Taiwan's equity benchmark .TWII slipped 0.5%, although Japan's Nikkei .N225 was 0.4% higher after flipping between small gains and losses.

The yen JPY=EBS strengthened some 0.3% to 147.605 per dollar, while the franc CHF=EBS firmed 0.2% to 0.8780 per dollar.

European markets offered a bright spot though, with pan-European STOXX 50 futures STXEc1 pointing up 0.55%.

Data on Sunday showed China's consumer price index fell at the sharpest pace in 13 months in February, while producer price deflation extended to a 30th straight month.

Beijing pledged more stimulus to boost consumption and foster innovation in artificial intelligence at the start of the week-long National People's Congress meeting that runs until Tuesday.

Elsewhere, U.S. President Donald Trump in a Fox News interview on Sunday declined to predict whether his tariffs on China, Canada and Mexico would result in a U.S. recession.

A run of soft U.S. economic data continued on Friday after monthly figures showed the labour market created fewer jobs than expected in February, in the first payrolls report capturing Trump's policies.

"I think it's Trump's cavalier approach to economic policy that's rattling sentiment," said Kyle Rodda, senior financial markets analyst at Capital.com.

"Unlike during his first administration, where signs of an economic slowdown or market correction would see a pivot on policy, he is genuinely focused on significant, structural change to the economy - even if it comes at the expense of short-term growth."

U.S. Treasury yields slid, with the 10-year yield US10YT=RR dropping as much as 6 basis points to 4.257% and the two-year yield US2YT=RR dipping 4.5 bps to 3.956%.

The U.S. dollar index =USD, which measures the currency against six major peers, added 0.1% to 103.82, reversing earlier small losses.

The euro EUR=EBS edged up slightly to $1.0839 and sterling GBP=D3 was little changed at $1.2917.

In his latest warning to Canada, Trump said on Friday that reciprocal tariffs on dairy and lumber could be imminent.

"For those struggling to keep up, that means that Canadian tariffs were imposed on Tuesday, tweaked on Wednesday, delayed on Thursday, then expanded again on Friday," said Michael Brown, senior research strategist at Pepperstone.

"In that sort of an environment, it is frankly impossible for any market participant to price risk."

The U.S. president also said he is strongly considering sanctions on Russian banks and tariffs on Russian products to try and bring a speedy end to the war in Ukraine.

That has dragged on crude oil, with Brent LCOc1 down 0.5% at $69.99 a barrel and U.S. West Texas Intermediate crude CLc1 down by 0.6% at $66.63 a barrel.

Cryptocurrency bitcoin BTC= lost as much as 7.2% from Friday to reach the lowest this month at $80,085.42, and was last at $82,280.

Optimism about looser regulation and the creation of a cryptocurrency reserve under Trump lifted the token to an all-time high of $109,071.86 in January, but it has struggled since.

The long-awaited executive order on creating the reserve came on Friday, but disappointed many investors by saying there would be no additional buying of bitcoin.