Today's Headlines

Bloomberg: 

• German Notes Fall on Economy Optimism as Italian Spread Narrows. Germany’s two-year notes declined for the first time in four days amid signs the global economic recovery is gathering pace, damping investor demand for the safest government assets. The extra yield that investors get for holding Italian 10-year securities instead of German bunds narrowed to the least since January as a report showed Italy’s industrial orders increased in March more than economists predicted. German 10-year yields approached the highest in seven weeks and Dutch bonds snapped a two-day gain.
• Europe’s debt frenzy undeterred by record recession. Investors are snapping up long-dated bonds from Europe’s high debt and deficit nations even as prices reach the most expensive levels since 2010 and the region’s deepening recession threatens to hamper deficit-reduction plans.
• European Stocks Advance as Carmakers Climb; Ryanair Rises. European stocks advanced, extending the Stoxx Europe 600 Index’s highest level since June 2008, as the region’s carmakers rallied. Peugeot SA and Volkswagen AG both gained more than 3 percent as Morgan Stanley raised its recommendation on European automobile companies. Ryanair Holdings Plc jumped the most in more than 1 1/2 years as Europe’s largest low-cost carrier said full-year profit rose 13 percent. Fresnillo Plc slid 3.3 percent as silver slumped to its lowest price since October 2010. The Stoxx 600 rose 0.3 percent to 309.77 at the close of trading.
• Luxury Car Prices Fall in China Amid Government Frugality Push. Prices of imported cars in China fell the most in five months, adding to signs that demand for luxury products is slowing because of a government campaign to rein in lavish spending by public servants. Average prices of imported cars in April fell 3.4 percent from a year earlier, according to Cheng Xiaodong, head of auto-price monitoring at the National Development and Reform Commission, China’s top economic planner. That compares with the 0.2 percent increase for locally made passenger vehicles.
• U.S. Faces Downgrade in 2013 Without Budget Deal, Moody’s Warns. U.S. policy makers must address debt loads projected to rise later this decade to avoid a 2013 downgrade, even as the latest budget projections are “credit positive,” according to Moody’s Investors Service. The U.S. budget deficit will drop to $378 billion in 2015 from a record $1.4 trillion in 2009, according Congressional Budget Office data. The federal government will post an $642 billion deficit this year, the first time in five years that the shortfall has been less than $1 trillion. Moody’s said Sept. 11 that the U.S.’s top Aaa rating would likely be cut to Aa1 if an agreement on the debt ratio isn’t reached. 
• Gold Reboundd After Moody’s Says U.S. May Face Downgrade. Gold and silver futures rebounded after Moody’s Investors Service said U.S. policy makers must address debt woes to avoid a credit-rating downgrade this year, boosting the appeal of the metals as a haven. “More needs to be done on the policy front to address this rising debt ratio,” said Steven Hess, a senior vice president at New York-based Moody’s. The ratio of debt to gross domestic product will increase in the long term, according to the Congressional Budget Office. Gold futures for June delivery gained 1.4 percent to settle at $1,384.10 an ounce at 1:43 p.m. on the Comex in New York. Earlier, the price touched $1,336.30, the lowest for a most-active contract since April 18.
• Fed’s Evans Says Economy Has Been ‘Improving Quite a Lot’. Federal Reserve Bank of Chicago President Charles Evans said the U.S. economy has improved “quite a lot” as the central bank maintains record stimulus. “I’m optimistic that the labor market has been doing much, much better and that unemployment is going to continue to go down,” Evans said in a speech in Chicago today. “Currently we have the appropriate monetary policy in place.”
• Arctic Refuge Oil Targeted by Alaksa Amid U.S. Reluctance. Alaska’s government proposed investing its own cash in an assessment of oil reserves in the U.S. Arctic National Wildlife Refuge, seeking to prod the federal government to consider drilling in the protected area. 

Wall Street Journal:

• Vista Equity Partners to Buy Websense(WBSN). Buyout firm Vista Equity Partners agreed to pay about $1 billion to acquire Websense Inc., WBSN +28.64% a maker of software and services designed to help protect companies against cyber attacks and data theft.
• Why the IRS Flap Matters Most for Obama. People in general, and journalists in particular, tend to like things that come in groups of three, because a collection of three is small enough to comprehend but big enough to suggest a trend. That's why it's so damaging that the Obama White House came face-to-face in recent days with three controversies bubbling up at once—the revival of questions about the attacks on U.S. outposts in Benghazi, Libya; the disclosure that the Justice Department secretly subpoenaed a raft of phone records from the Associated Press in search of a leaker; and the news that the Internal Revenue Service targeted for special scrutiny conservative groups seeking tax-exempt status.

Fox News: 

• Fact check rips IRS official over Tea Party targeting claims.

CNBC: 

• Rumors Spark Bank Run, Break-Ins in Brazil. Rumors that Brazil's social security fund called Bolsa Familia was to be cancelled led thousands of people to rush to withdraw money from a Brazilian bank over the weekend. Customers lined up at ATMs at dozens of bank branches of Caixa Economica Federal, a government-owned bank, which pays the social security subsidy on Saturday and Sunday. 
• QE Halt Would Be 'Too Violent' for Market: Fed's Fisher. (video) The Federal Reserve should not go from "wild turkey" monetary policy to "cold turkey" overnight, Dallas Fed President Richard Fisher told CNBC on Monday, saying that when to dial back is the key because stopping would be "too violent for the marketplace."

Zero Hedge: 

• The Most Dangerous Country In Europe.
• Portugal Banks Warn European Leaders: "You Can't Keep Playing With Fire".
• Caterpillar(CAT) North America Sales Collapse Suggests US Economy Back To 2010 Levels.  (graphs)
• Europe's 'Status Quo Pandering' Risks "Radicalization Of An Entire Generation".
• Bernanke "Wealth Effect" Completely Wasted On Trillions In Pension Funds.

Business Insider: 

• Here's The Search Warrant Where The FBI Called A Fox News Reporter A 'Co-Conspirator' In A Leak Investigation.
• Here's Fox News' Scathing Statement On The Leak Investigation Into One Of Its Reporters.
• Goldman(GS) Is Selling The Last Of Its Stake In A Chinese Bank, And Communist Officials Are Probably Pretty Annoyed.
• The Gold Shorts Continue To Pile On. (graph)
• The End Of The Car Age In One Chart.
• CalPers Votes To Split Jamie Dimon's Role.
• Apple(AAPL) Will Begin Production Of A Lighter, Thinner iPad In July, Says DigiTimes.
• This Chart Shows The One Reason Yahoo-Tumblr Skeptics Might Be Right.

Telegraph:

• EU arms second front in China trade war with Huawei probe. The European Commission is poised to launch an anti-dumping probe against Chinese mobile companies Huawei and ZTE, opening a second front in its escalating trade clash with China.
• Japanese growth could be 'sugar high', warns former World Bank president Robert Zoellick. Japan's 0.9pc growth in the first quarter could just be a "sugar high" following the government's massive stimulus measures, former World Bank president Robert Zoellick has said.