Today's Headlines

Bloomberg: 

• Merkel Says More EU Russia Sanctions If Truce Violated. Three Ukrainian soldiers were killed as pro-Russian rebels continue to defy a cease-fire and the Kremlin ramps up military exercises along its western land and sea borders with NATO and Nordic nations. Separatists used mortars and grenade launchers against Ukrainian government forces at Donetsk airport and near the strategic Sea of Azov city of Mariupol, Andriy Lysenko, spokesman for Ukraine’s military, told reporters on Tuesday in Kiev. He said five soldiers were wounded in the attacks. “The separatists are preparing for a renewed offensive, probably in Mariupol, that’s likely to begin within weeks,” Joerg Forbrig, a senior program director at the German Marshall Fund in Berlin, said by phone.  
• Putin’s Reckless Without Any Provocation, U.S. Commander Says. The U.S. Army’s top officer in Europe called Vladimir Putin “reckless” after the Russian president disclosed that he considered placing Russian nuclear forces on alert during the crisis in Crimea last year. “He obviously does not care what the world thinks of him,” Lieutenant General Ben Hodges, who commands U.S. Army forces in Europe, told reporters at a breakfast meeting Tuesday in Washington.
• BOE’s Brazier Says Greek Shock Could Trigger Market Correction. A failure to find a political solution to Greece’s sovereign debt problem could trigger a market correction, Bank of England official Alex Brazier said. “A bad outcome in these negotiations could trigger a broader reassessment of risk in financial markets,” Brazier, executive director for financial stability at the BOE, told U.K. lawmakers in London on Tuesday.  
• Europe Stocks Fall as German Investor Confidence Misses Forecast. European stocks slipped the most in a week as a measure of German investor confidence missed forecasts. Automakers led declines, with Peugeot SA sliding 5.9 percent. Holcim Ltd. and Lafarge SA dragged construction stocks lower amid disagreements over the leadership and financial terms of their proposed merger. A measure of energy stocks posted the best performance of the 19 industry groups on the Stoxx Europe 600 Index. The Stoxx 600 slid 0.7 percent to 397.33 at the close, paring earlier losses of as much as 1.1 percent in the final hour of trading.
• Citi Sees Slower Commodities Demand Growth as China Recedes. Global commodity markets will see slower and less synchronized demand growth from across the world as China’s dominance fades, according to Citigroup Inc. Global demand expansion, which centered on the rise of China in the 2000s, will slow in the next decade and be driven increasingly by India, Southeast Asia, the Middle East, Latin America and Africa, the New York-based bank said in a report e-mailed Tuesday. While demand will increase from these regions, dubbed the “Emerging 5”, it won’t be enough to offset the impact of slower growth from China, Citigroup said.  
• Disappointing Economic Data Probably Won't Faze the Fed. U.S. economic data have been more disappointing than at any time in six years. That hasn't shaken a plurality of economists who still see the Federal Reserve cranking up their benchmark interest rate in June, for the first time since 2006. Thirty economists project the central bankers, who start a two-day meeting Tuesday, will pull the trigger at their June 16-17 gathering, according to a Bloomberg survey completed March 12 that yielded 66 responses. Another 21 said the Fed will embark on rate rises in September.
• The Fuzzy, Insane Math That's Creating So Many Billion-Dollar Tech Companies. Startups achieve astronomical valuations in exchange for protecting new investors. Snapchat, the photo-messaging app raising cash at a $15 billion valuation, probably isn't actually worth more than Clorox or Campbell Soup. So where did investors come up with that enormous headline number? Here's the secret to how Silicon Valley calculates the value of its hottest companies: The numbers are sort of made-up. For the most mature startups, investors agree to grant higher valuations, which help the companies with recruitment and building credibility, in exchange for guarantees that they'll get their money back first if the company goes public or sells. They can also negotiate to receive additional free shares if a subsequent round's valuation is less favorable. Interviews with more than a dozen founders, venture capitalists, and the attorneys who draw up investment contracts reveal the most common financial provisions used in private-market technology deals today.

ZeroHedge:

• Options Market Signals 2007-Like Crash Risk, Goldman Warns. (graph)
• America's European "Allies" Desert Obama, Join China-led Infrastructure Bank.
• Something Strange Is Going On With Nonfarm Payrolls. (graph)
• Saxobank CIO Warns: "Fed Rate Hike In June Is A Margin Call On Assets". (graph)
• The Undebtors: Sworn Enemies Of The Vampires Of Debt.
• The USO "Carnage" Has Only Just Begun. (graph)
• Wall Street Poised For Another Revenue Bloodbath After Harbinger Jefferies Reports 56% Fixed Income Plunge. (graph)
• Treasury Secretary Lew Admits US "International Credibility & Influence Is Being Threatened". (graph)
• Greece Faces Cash Crunch This Friday Without "Plan A Or Plan B": What Happens Next.
• Housing Starts Collapse Most In 8 Years To 18 Month Lows. (graph)
• WTI Slumps To New Cycle Lows As Iran Supply Fears Loom. (graph)

Business Insider:

• This sentence should cause a lot concern about Iran taking over Iraq. "Iran is an empire once again at last, and its capital is Baghdad," said Ali Younusi, an adviser to Iranian Supreme Leader Khamenei.
• This map shows the massive scale of Russia's planned fortification of the Arctic.

Financial Times:

• Euro Area Could Survive a Greece Exit, Van Overtveldt Says. "What we have now in place would certainly allow us to survive that," Belgian Finance Minister Johan Van Overtveldt says in an interview, referring to an exit by Greece from the euro area. Greece's negotiating tactics have "annoyed" and "frustrated" its partners in the group of nations using the euro, Van Overtveldt said.

Telegraph:

• Bank of England director: 'Greece will not in any realistic scenario repay its debts'. Alex Brazier, executive director for financial stability strategy and risk, says political pressure means Greece will never run a budget large enough to repay its debts.

Interfax:

• Rebels Should Take Cities in Donbas That Held Referendum. Rebels say they will work w/Ukraine as equal partners after they gain control of all cities that held referendum, citing Donetsk rebel leader Alexander Zakharchenko. Donetsk region is reading to start using Russian rubles, he said.