U.S. equity futures are back in the green, while Asian and European stocks are mixed after worries about a U.S.-led trade war put world stocks at risk of their first two day loss of the year on Thursday, while bond markets bounced as China poured cold water  on reports that it might stop buying U.S. debt.

As poured cold water  , the current market challenge is to assess whether the slew of reports we’re getting are ‘fake news’ – Bloomberg’s report on Wednesday about China Treasury holdings triggered a fixed income sell off. However, China’s FX authority SAFE overnight condemned those reports as ‘false news’, which nonetheless may have been a simple “trial balloon” to gauge the market’s reaction to when the real announcement comes. Amid the confusion, Treasuries have unwound much of yesterday’s move.

What’s clear, as some trading desks note, is that whether it’s fake news or not, the market mindset right now is ‘react first, check later’. This has resulted in choppy markets and a welcome pick up in volatility – although the subsequent backtracking is less welcome, these market dynamics may become a frequent feature of 2018.

Then, another Reuters report late Wednesday said Canada was “increasingly convinced” Trump will announce the US is pulling out of Nafta. Following the news there was a report that Mexico will leave NAFTA negotiation if President Trump triggers 6-month process to withdraw from the deal. Both the CAD and MXN immediately sold off and remain on edge, awaiting official confirmation.

“The denial of the China story puts the dollar back where it was though the yen is still strong, so to me that is the interesting move and whether that is going to stick,” said Saxo Bank’s head of FX strategy John Hardy. “The 2.5 percent level on the Treasury is a line in the sand so U.S. CPI (inflation) data tomorrow is going to be absolutely critical,” he added, talking about the view that higher inflation will encourage more U.S. interest rate hikes.

U.S. 10Y TSY yieldspulled back to 2.544 percent from Wednesday’s ten-month high of 2.597 percent. Euro zone bond yields eased 1-3 basis points (bps) too, with Germany’s 10-year Bund yield 3 bps off a two-month high at 0.46 percent. China’s denial also helped the dollar to its fourth gain in the last five days against a basket of top world currencies, having suffered one of its worst years on record in 2017. Against the yen, it added 0.3 percent to 111.63, after hitting a six-week low of 111.27 yen in the previous session when it skidded 1.1 percent, its largest decline in almost eight months.

There was also some relief from Japan, another source of pain for bond markets this week. The Bank of Japan maintained the amount of its bond purchases on Thursday. A cut in its buying of longer-dated debt earlier this week had fanned worries the BOJ may be moving to turn off its stimulus. Specifically, as RanSquawk explains, “10yr JGBs found some reprieve from this week’s selling on mild short-covering and after the BoJ’s Rinban announcement in which purchases in 1yr-10yr maturities were maintained at a respectable amount of nearly JPY 1tln.”

Still, as Bloomberg – which started this whole mess notes – while traders have shaken off some of the concerns that led to Wednesday’s declines, they’re still struggling to find fresh reasons to extend a rally that took global stocks to or near record highs earlier this week. A string of earnings releases starting with JPMorgan Chase & Co. and Wells Fargo & Co. on Friday might offer them more direction.

Looking at world equity markets, Europe’s main bourses are modestly in and out of the red and MSCI’s world index was down 0.2% after Asian and emerging market indexes had been pulled lower by the abovementioned warnings from Canada and Mexico that NAFTA’s days could be numbered. Asian equities were mixed – rallying in China while the Nikkei was down.

European stocks are little changed amid a slew of corporate results as investors continue to assess the new year’s equity rally. The Stoxx Europe 600 Index rises less than 0.1% following Wednesday’s 0.4% drop, which snapped a five-day winning streak. Miners are the best performers among industry groups, advancing for a sixth straight session, while retail shares drop with Tesco Plc after its Christmas sales missed estimates. Hexagon AB is the best performer among technology shares after its Chief Executive Officer Ola Rollen was acquitted by a Norwegian court of insider-trading charges.

The euro traded at $1.1945, nearly flat on the day, and holding above Tuesday’s low of $1.1916. There was more upbeat data for the shared currency though. German economy grew at the strongest rate in six years last year a preliminary estimate from the country’s statistics office showed, although it was slightly under some peoples’ forecasts.

Bitcoin also took a major beating, falling as much as 11% as South Korea – one of the crytocurrency’s biggest markets – said it was drawing up laws to ban trading in it.

European stocks edged lower, extending Wednesday’s retreat as retailers declined, while bonds gained as investors sought to put the turbulence of midweek behind them.

After Treasuries slid on Wednesday, with the 10Y yield rising as high as 2.59%, the Treasury complex found support on the back of a statement by China’s State Administration of Foreign Exchange in response to media reports that it may reduce or halt its purchases of US Treasuries. The statement stipulated that the report may have cited wrong sources or may be fake news (using translation from Bloomberg). The USD found support versus the JPY, although the move corrected less than half of yesterday’s USDJPY selloff. Equities were mixed – rallying in China while the Nikkei was down.

Commodity markets meanwhile were taking something of a breather after a flying start to the year.

Both Brent and West Texas Intermediate oil price futures were hovering just off three-year highs at just under $70 and $64 a barrel, with WTI briefly rising above $64 overnight, triggering stops, while industrial metals dipped and gold ticked to $1,317.76 after spiking to nearly four-month highs in the previous session.

“In Q1, the balance of risk to Brent lies to the downside, with prices overheating, record net-length built into the futures market and fundamentals set to weaken seasonally,” BMI Research said in a note.