Stock markets in Asia slid on Monday after President Donald Trump threatened to impose additional tariffs on eight European nations, pending the US being allowed to purchase Greenland.

This move pushed the dollar down against the safe-haven yen and Swiss franc.

Gold and silver both reached all-time highs, while oil prices remained flat amid concerns about the potential impact of an all-out trade war between the US and Europe on global growth and demand.

A holiday in US equity and bond markets made for thin trading and likely contributed to a 0.8% drop in S&P 500 futures and a 1.1% fall in Nasdaq futures.

For Europe, EUROSTOXX 50 futures and DAX futures both shed 1.3%, while FTSE futures lost 0.6%. Japan’s Nikkei fell 1.4%, and MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.3%.

Trump said he would impose additional 10% import levies from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, rising to 25% on June 1 if no deal is reached.

Major European Union states decried the tariff threats over Greenland as blackmail, and France proposed responding with a range of previously untested economic countermeasures.

The EU’s options include a package of its own tariffs on 93 billion euros ($108 billion) of US imports that was suspended for six months in early August and measures under an Anti-Coercion Instrument that could hit US services trade or investments.

Analysts at Deutsche Bank noted European countries owned $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined, and might consider bringing some of that money back home.

“With the US net international investment position at record negative extremes, the mutual interdependence of European-US financial markets has never been higher,” said George Saravelos, Deutsche’s global head of FX research.

“It is a weaponisation of capital rather than trade flows that would by far be the most disruptive to markets.”

It should also make for a fraught few days at Davos as leaders from around the world gather at the World Economic Forum, including a large US group led by Trump himself.

Chinese blue chips bucked the trend and rose 0.4% as data showed annual economic growth slowed to 4.5% in the December quarter, but still topped forecasts.

Industrial output also beat the market thanks to strength in exports, but a miss in retail sales underlined the continued weakness of domestic demand.

The Bank of Japan meets on Friday and, while no rate hike is expected this time, policymakers could flag a tightening as soon as April.

One added wrinkle is domestic politics, given that Japanese Prime Minister Sanae Takaichi is expected to soon dissolve parliament to allow for an election in February.

Delayed data on US core inflation and consumption for November are due on Thursday and will refine investor expectations for when the Federal Reserve might cut again.

A run of solid economic news at home has seen markets largely give up on an easing before June, with April priced at 65% for no change.

Earnings season continues as banks are joined by a more diverse set of companies, including Netflix, Johnson & Johnson, General Electric and Intel.

In currency markets, the euro recovered from an early dip to rise 0.2% to $1.1620, while sterling clawed its way back up to $1.3387.

The dollar eased 0.4% against the Swiss franc to 0.7991 francs, and 0.2% against the yen to 157.77.

The cash Treasury market was shut, but 10-year futures firmed 1 tick.

The 30-year contract actually fell 6 ticks as the risk of European selling loomed large.

Gold proved more of a safe harbour, rising 1.7% to $4,673 an ounce, while silver climbed 3% to $94.0.

Oil prices were flat, amid lingering concerns about a potential US strike on Iran as a US Navy aircraft carrier group was expected to arrive in the Persian Gulf this week.

Brent was little changed at $64.19 a barrel, while US crude rose 0.1% to $59.52 per barrel.