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[Bloomberg Markets]( [FOLLOW US [Facebook Share]]([Twitter Share]( [SUBSCRIBE [Subscribe]](  Forward Guidance  It's not a trade war - it's a negotiating position, markets rally, and Facebook says business is fine. Time to talk The White House’s National Economic Council Director Larry Kudlow was on a mission to calm markets yesterday following the [global selloff]( in the wake of China’s response to U.S. proposed tariffs. “Remember, none of the tariffs have been put in place yet,” he said in a Bloomberg News interview, emphasizing that it would take [at least two months]( before any action is taken on what are still only proposals. Cui Tiankai, China’s ambassador to the U.S., said that while consultations would be his country’s preference, “it takes [two to tango](.” Republicans, meanwhile, are warning President Donald Trump that an economic war with China would deal an economic blow to [politically important areas]( ahead of November’s elections. Rebound The reassuring words from the White House administration took all the steam out of yesterday’s early session selloff, with the S&P 500 Index closing [1.2 percent higher](. That set the theme for trading in the rest of the world, with the MSCI Asia Pacific Index gaining 0.6 percent overnight, while Japan’s Topix index closed 1.1 percent higher. In Europe, the Stoxx 600 Index was 1.5 percent higher by 5:50 a.m. Eastern Time, with the DAX Index among the best gainers. S&P 500 futures pointed to [an increase at the open](, the 10-year Treasury yield was at 2.826 percent and gold was lower. Reassurance Shares in Facebook Inc. rallied in pre-market trading after Chief Executive Officer Mark Zuckerberg said he hadn’t observed “[any meaningful impact](” on the business from weeks of revelations over use of user data. Zuckerberg said he is still the right person to run the company after it revealed that data on [most of its 2 billion users]( could have been accessed improperly. The embattled CEO is set to appear before a joint hearing of the Senate Judiciary and Commerce Committees [next Tuesday](. PMIs It was PMI day in Europe, with softer-than-expected data across the board. A composite Purchasing Managers’ Index dropped to 55.2 in March, from 57.1 the previous month, adding to signs the region’s recent growth surge [has peaked](. In the U.K., the Markit services Purchasing Managers Index [dropped to 51.7](, the lowest level since July 2016, and far below economist predictions. The bad weather in March is taking much of the blame for the drop, meaning an expected interest rate hike from the Bank of England next month is unlikely to be derailed by the disappointing data. Coming up… At 8:30 a.m., weekly jobless claims data are published, with investors likely to keep a close eye on the number following last week’s surprise drop to the lowest level [since January 1973](, and ahead of tomorrow’s payroll numbers. The other major piece of economic data from the U.S. this morning is the February trade balance, also due at 8:30 a.m. With trade such a hot topic at the moment, there may be more interest than usual in today’s number. Here's what you should read today - Crash course in market timing shows [cost of being wrong]( at tops. - A wild ride is the new normal for [U.S. stocks](… - … And here are some key [S&P 500 levels]( to watch as markets fluctuate. - Trump sending national guard to [Mexican border](... - ...As he softens [key Nafta demand]( on regional car content. - Echoes from half a century ago fan fears of [resurgent inflation](. - Central bank corporate-bond purchases work, central-bank [research finds](. Sponsored content by PIMCO Tapping Yield at the Front End of the Curve After a decade of anemic short-term yields, recent volatility is auguring a shift in the status quo. We’re now seeing opportunities for active investors to tap yield and spread at the front end of the curve – sending a clear signal that it may be time to actively reevaluate liquidity management strategies. [Here’s why we think investors should consider what’s happening at the front end of the yield curve](.   And finally, here’s what Joe’s interested in this morning Paul Krugman wrote a [great column yesterday about trade wars](, exploring their impact on stocks and GDP. The basic gist: the direct effect of tariffs on growth would probably be modest. The bigger deal, he writes, is that a decline in global trade would force companies to radically shift supply chains, creating "stranded assets." He writes: "The notebook on which I’m writing this was designed in California, but probably assembled in China, with many of the components coming from South Korea and Japan. Apple could produce it entirely in North America, and probably would in the face of 30 percent tariffs. But the factories it would take to do that don’t (yet) exist. Meanwhile, the factories that do exist were built to serve globalized production – and many of them would be marginalized, maybe even made worthless, by tariffs that broke up those global value chains." Relatedly, yesterday, my colleague Tracy Alloway [asked in a Twitter poll]( whether trade wars are inflationary or deflationary. It's a tough question. A slowdown in growth would probably, on net, reduce inflation. And things like yesterday's plunge in soybean prices is also deflationary. But if you figure that the best mechanism to fight price pressure is increased productivity, it stands to reason under Krugman's framework that a trade war -- which renders certain U.S. physical assets, and workers, stranded while forcing the creation of new supply chains -- would be damaging to productivity. And therefore inflationary. This is all theoretical right now, but it's a useful framework to consider.   Before it's here, it's on the Bloomberg Terminal Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. [Learn more.](   You received this message because you are subscribed to the Bloomberg Markets newsletter.   [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022