GLOBAL MARKETS-Stock futures dip after Trump slaps tariffs on Canada; dollar gains

By Stella Qiu

SYDNEY, July 11 (Reuters) - U.S. and European stock futures dipped in Asia on Friday after President Donald Trump stepped up tariff threats against Europe and Canada, restraining an early rally in regional share markets.

The dollar gained on the euro and the Canadian currency as Trump issued a letter late on Thursday that a 35% tariff rate on all imports from Canada would apply from August 1, adding the European Union would receive a letter by Friday.

The U.S. president, whose global wave of tariffs has upended businesses and policymaking, floated a blanket 15% or 20% tariff rate on other countries, a step up from the current 10% baseline rate.

Both Nasdaq futures NQc1 and S&P 500 futures ESc1 fell about 0.4%. EUROSTOXX 50 futures STXEc1 also dropped 0.4%.

The euro EUR=EBS slipped 0.2% to $1.1676, while the dollar gained 0.3% to C$1.3695 CAD=.

Earlier in the week, Trump pushed back his tariff deadline of July 9 to August 1 for many trading partners to allow more time for negotiations, but broadened his trade war, setting new rates for a number of countries, including allies Japan and South Korea, along with a 50% tariff on copper.

Joseph Capurso, head of international economics at the Commonwealth Bank of Australia, said the tariff rate of 35% on Canada is not as bad as feared because most of the imports are still subject to exemptions under the United States-Mexico-Canada Agreement (USMCA).

"Now the tariff rate on imports from the EU... That's what we don't know as yet... The potential escalation between the EU and the US is a big deal for financial markets," said Capurso.

"If you get something similar to (the U.S.-China trade war in April), that's going to be very destabilising."

Overnight, Wall Street indexes rose modestly but posted record closing highs as chip giant Nvidia NVDA.O made history with a closing market valuation above $4 trillion.

The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS wobbled but was last up 0.5% on Friday. That brought the weekly gain to 0.7%.

Tokyo's Nikkei .N225 reversed earlier gains to be off 0.1%, and is set for a weekly drop of 0.6%. It was dragged lower by an almost 7% drop in shares of Uniqlo owner Fast Retailing 9983.T after it warned of a significant tariff impact.

China's blue chips .CSI300 rose 0.5%, while Hong Kong's Hang Seng index .HSI rallied 1.3%.

Investors are gearing up for second-quarter U.S. corporate earnings next week to gauge the impact of Trump's trade war launched with his "reciprocal" tariff announcement on April 2. JPMorgan Chase JPM.N is due to release results on Tuesday, essentially kicking off the reporting period.

In Treasury markets, moves were muted in Asia. Benchmark 10-year U.S. Treasury yields US10YT=RR rose 1 basis point to 4.3577%, having edged up a tiny bit overnight after data showed jobless claims unexpectedly fell last week.

Oil prices rose after losing 2% overnight. Brent crude futures LCOc1 gained 0.6% to $69.06 a barrel, having lost 2.2% a day earlier.

U.S. West Texas Intermediate crude CLc1 was up 0.7% at $67.05 a barrel.

Spot gold XAU= rose 0.2% to $3,329 an ounce.

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