A “Beautiful Letter”
The U.S. and China began a pivotal round of trade negotiations with hours to go before the Trump administration ratchets up tariffs on $200 billion of Chinese imports, to 25% from 10%. Beijing has vowed to retaliate should Trump follow through with his threat, but simply responding with its own tit-for-tat tariffs isn’t China’s most likely move, said Brad Setser, a senior fellow for international economics at the Council on Foreign Relations. The country has a powerful financial-market arsenal for its trade tussle with America, including a hoard of Treasuries and its currency. But using those weapons is not without cost. Meanwhile, U.S. President Donald Trump put a positive spin on the talks, saying he had received a “beautiful letter” from Chinese President Xi Jinping and that a deal is still possible.

Uber’s $8.1 Billion IPO
Uber Technologies Inc. raised $8.1 billion in its initial public offering after pricing shares near the bottom of their marketed range. It’s set to be among the 10 largest U.S. IPOs of all time, and the biggest since Alibaba’s record-breaking $25 billion listing in 2014. The ride-hailing company sold 180 million shares for $45 each, after marketing them for $44 to $50 apiece. The price gives San Francisco-based Uber a market value of $75.5 billion. A host of other startups, including Slack, Airbnb and Postmates, will no doubt be keeping a close eye on Uber’s trading performance.

More Equity Pain
Asian shares are set for a mixed start to trading Friday, still on track for their worst week since October, as the U.S. and China began a pivotal round of trade negotiations. Treasuries climbed and the yen maintained gains. Futures signaled modest declines in Tokyo and Australia, and a rebound in China. U.S. contracts ticked lower. Earlier, the S&P 500 Index closed lower but losses were pared after Trump’s “beautiful letter” comments. Sentiment remains fragile and the gap between 3-month and 10-year Treasury yields briefly turned negative, traditionally a recession warning.

Awkward Snub
The FCC blocked China Mobile from providing phone services in the U.S., citing national security concerns and said it was opening a review of other Chinese companies amid friction between the world’s biggest economies. The U.S.’s efforts to persuade other countries to shun Huawei isn’t going quite as well, with only a handful of countries following suit. All of it could intensify pressure on Chinese Vice Premier Liu He to secure a good deal or risk tearing open a wound of national shame. Comments from nationalist-leaning commentators have emerged on Chinese internet platforms in recent days comparing Liu to the Qing dynasty official who signed a much-maligned treaty with Japan more than a century ago.

Korean Rocket Ruckus
Pyongyang fired two short-range missiles on Thursday, an act of defiance and its second launch in less than a week, suggesting Kim Jong Un’s regime isn’t ready to negotiate with the U.S. The launches took place as Trump’s top envoy to North Korean negotiations, Stephen Biegun, was in Seoul to discuss how to jump-start talks stalled since Trump and Kim failed to reach an accord at a summit in Vietnam in February. The U.S. stepped up the tension by using civil forfeiture to seize a ship allegedly used to carry coal out of North Korea and heavy machinery in, a departure from its more muted response to Kim’s earlier missile test. “They’re smaller missiles,” Trump told reporters on Thursday. “Nobody’s happy about it.”