In Asian Equity Markets indices were mixed on Friday as investors reacted to an escalating trade war between the U.S. and China, developments in Australian politics and economic data from Japan. In Australia, the ASX 200 was up 0.27 percent as politics in the country took center stage in Friday’s trading session. Greater China markets declined. The Hang Seng Index fell 0.67 percent, with most sectors seeing losses. The Shanghai Composite fell 0.33 percent, while the Shenzhen Composite lost 0.38 percent. In Japan, both the Nikkei 225 and the Topix index rose 0.35 percent.

In Currency Markets the dollar held onto recent gains in early trade on Friday after U.S. and Chinese officials ended two days of trade talks without any major breakthroughs. The talks between the two nations ended as their trade war escalated on Thursday after a new round of U.S. tariffs kicked in on $16 billion worth of imports from China, followed immediately by reciprocal tariffs from China. The Australian dollar was down about 0.1 percent. It gave up nearly 1.4 percent on Thursday amid political troubles for Prime Minister Malcolm Turnbull. The euro edged higher to about $1.154, recouping some losses after shedding more than half a percent during the previous session.

In Commodities Markets oil prices rose on Friday as U.S. sanctions on Iran are expected to cut significant volumes of crude from the market, although trading was muted by concerns over the unresolved trade dispute between Washington and Beijing. Brent crude oil futures were at $75.07 per barrel at 0424 GMT, up 34 cents, or 0.5 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $68.24 per barrel, up 41 cents, or 0.6 percent. Traders said the supply versus demand outlook for oil markets was relatively tight because of the looming U.S. sanctions against Iran, which will target oil exports from November.

In US Equity Markets stocks fell on Thursday, hurt by declines in commodity-related sectors and trade-sensitive companies as new trade tariffs came into effect in the U.S.-China trade war, although gains in technology shares helped limit losses. The trade-sensitive S&P industrials sector fell 0.51 percent. Caterpillar slid 2.2 percent and Boeing fell 1.2 percent, weighing on the Dow Industrials.  The S&P 500 was down 0.23 percent, at 2,855.23 and the Nasdaq Composite was down 0.21 percent, at 7,872.75. Shares of Hormel Foods fell 3.1 percent and Sanderson Farms 1.4 percent after they posted disappointing results, laying the blame partly on tariffs.

In Bond Markets U.S. Treasuries were little changed on Thursday ahead of a speech by Federal Reserve Chairman Jerome Powell on Friday, after minutes from the U.S. central bank’s most recent meeting showed that further interest rate hikes are likely soon. Benchmark 10-year notes gained 1/32 on the day to yield 2.821 percent, down from 2.824 percent on Wednesday. The difference in yield between 2-year and 10-year notes narrowed to 20 basis points, the flattest yield curve since 2007. Kansas City Fed President Esther George said on Thursday that two more rate hikes this year “could be appropriate.”