A look at the day ahead in European and global markets from Tom Westbrook

Gold made a foray towards the $3,000-an-ounce mark in the Asia session overnight, touching $2,942, functioning as markets' release valve for the unpredictability of Donald Trump.

Central banks have been big buyers for months, along with investors seeking safety. Worries about U.S. tariffs on gold have also set off a scramble to get the stuff out of London vaults and across the Atlantic.

Stocks broadly steadied on Tuesday as Trump said he was considering exempting Australia from steel tariffs, following a call with Australia's Prime Minister - reinforcing investors' belief that everything's negotiable.

Trump likes that the U.S. runs a trade surplus with Australia and said "the reason is they buy a lot of airplanes. They're rather far away and they need lots of airplanes."

He has vowed to impose reciprocal tariffs on countries over the next two days.

Markets' focus on Tuesday will likely also be on Fed Chair Jerome Powell's testimony on Capitol Hill, where he is sure to be questioned about his thinking on inflation and tariffs.

He is due to appear over two days and on Wednesday his testimony will follow consumer price data for January.

Markets have already scaled back expected rate cuts this year to just 38 basis points.

EV MARKET BATTLE INTENSIFIES

A DeepSeek-esque shakeout unfolded among electric vehicle stocks on Tuesday.

China's BYD (SZ:002594) has started offering advanced autonomous driving features on most of its models, including ones priced as low as $9,555, far undercutting competitors such as Tesla (NASDAQ:TSLA).

And Leapmotor (HK:9863), the Chinese partner of Stellantis (NYSE:STLA), launched on Tuesday a new EV with smart driving technology priced under 150,000 yuan ($20,535).

Tesla shares were down 3% to a two-month low overnight while shares in Chinese automakers Xpeng (NYSE:XPEV) and Geely Auto (HK:0175) tumbled in Hong Kong on Tuesday.

BYD's Hong Kong shares, meanwhile, climbed more than 4% to a record high.

Key developments that could influence markets on Tuesday:

- Earnings: BP (NYSE:BP), Banco BPM

- Speeches: BoE's Mann and Bailey

- Jerome Powell testifies to the Senate Banking, Housing and Urban Affairs Committee