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World stocks wavered and the US dollar eased on Friday as turmoil in the US administration kept markets watchful at the end of a week scarred by concerns that US tariffs could provoke a trade war.

The MSCI All-Country World index, which tracks 47 countries, was flat after three straight sessions of losses and was set for a weekly fall of around 0.6 per cent.

European shares found some support in deal making activity although the STOXX 600 was on track for a 0.2 per cent weekly loss. That followed losses in Asia and Wall Street overnight.

The New York Times reported that US Special Counsel Robert Mueller had issued a subpoena for documents, including some concerning Russia, related to President Donald Trump’s businesses.

“Trump isn’t giving markets much respite,” said Rabobank analyst Bas van Geffen in a note. “While still vague at best, the subpoena does bring the investigation yet another step closer to the president. Markets certainly didn’t like the added uncertainty.”

The Washington Post reported Trump has decided to remove H.R. McMaster as his national security adviser.

This follows the departures of Secretary of State Rex Tillerson and top economic adviser Gary Cohn, adding to concerns about the implications for US policy.

The developments, together with a report earlier this week that Trump is seeking to impose tariffs on up to $US60 billion of Chinese imports, cemented investors’ worries that the administration is increasingly leaning towards protectionism.

White House trade adviser Peter Navarro has said that Trump would get options in the coming weeks to address China’s “theft and forced transfer” of American intellectual property as part of an investigation.

“The key here is whether the main battle ground of the trade war will reach IT digital products,” said Hiroshi Watanabe, economist at Sony Financial Holding.

The US administration is negotiating to revamp the North American Free Trade Agreement and last week announced the imposition of tariffs on steel and aluminium imports, which have weighed on shares in some European steelmakers and industrial companies. Trump has offered exemptions from the tariffs to NAFTA members Canada and Mexico.

A phone call between US Commerce Secretary Wilbur Ross and European Trade Commissioner Cecilia Malmstrom to resolve the tariff dispute failed to bring results as they agreed to meet next week, a source said.

Fears that the tariffs could disrupt synchronised global growth dwarfed recent strong economic data, including a fall in US jobless claims.

In currency markets, reports of the possible removal of US security adviser McMaster weighed on the dollar, sending it to its lowest level against the yen since early March. The euro traded up 0.22 per cent at $US1.2330, having slipped 0.5 per cent the previous day.

The US dollar index, which measures the greenback against a basket of six other major currencies, was down 0.25 per cent at 89.912, easing after two days following remarks from incoming White House economic adviser Larry Kudlow who said he would like the dollar to be stronger.

Weakness in the dollar helped copper prices recover from early falls, as a weaker dollar makes metals cheaper for holders of other currencies. Three-month copper on the London Metal Exchange was up 0.52 per cent at $US6,956 a tonne.

Oil prices edged up but were set to fall this week on concerns among investors about rising supply from the United States and elsewhere threatening to undermine efforts by OPEC and other producers to tighten the market.

Brent futures rose 0.20 per cent at $US65.25 per barrel.

Southern European government bonds outperformed their higher-rated peers as another ECB policymaker warned that inflation in the euro zone is still proving elusive, a potential hurdle to the withdrawal of monetary stimulus.

Other euro zone bond yields also dipped. Germany’s 10-year bond touched a fresh five-week low of 0.57 per cent.

US Treasuries yields dipped to 2.815 per cent after having hit a near two-week low of 2.797 per cent on Thursday. The two-year yield steadied after hitting a 9 1/2-year high of 2.295 per cent as investors prepared for a widely expected interest rate increase by the Federal Reserve next week.