- EU Said to Welcome Greek Progress While Seeking More Work. Euro-area finance ministers welcomed the progress Greece has made on meeting the terms of its bailout program while demanding more work before funds can be released, according to two officials. Finance chiefs meeting in Brussels on Monday will issue a statement to endorse Greece’s work on a plan to fix up its economy, the officials said, asking not to be named because the talks were private. More time and effort will be required to bridge the differences between Greece and its creditors on some issues that remain unresolved, the officials added.
- Spanish Bonds Fall With Italy’s as Talks on Greece Rattle Market. Spanish and Italian government bonds fell for the first time in three days as concern Greece’s negotiations with its creditors will fail to prevent it running out of money prompted a flight out of euro-area debt markets. The region’s finance ministers met in Brussels Monday and welcomed the progress Greece has made while demanding more work before funds can be released, according to two officials who asked not to be named because the talks were private. On Tuesday, Greece must pay about 750 million euros ($836 million) to the International Monetary Fund. Italy is set to auction as much as 7 billion euros of debt due between 2018 and 2046 on May 13. Germany’s bonds declined. Spain’s 10-year bond yield rose eight basis points, or 0.08 percentage point, to 1.75 percent at 5 p.m. London time, after dropping 23 basis points over the previous two trading days. The 1.6 percent security due in April 2025 fell 0.75, or 7.50 euros per 1,000-euro face amount, to 98.66. Similar-maturity Italian bond yields increased nine basis points to 1.77 percent.
- Putin's Tanks Draw Cheers in Russian City Jammed Between NATO Nations. Tanks and ballistic missiles lumbered past thousands of spectators gathered in Kaliningrad on Saturday to mark the 70th anniversary of the Allied victory in Europe, an historic triumph for Russia that the Kremlin has used to whip up a new nationalist fervor. “We need to show our enemies, who deem us guilty just because we exist, that Russia is a very peculiar woman—she can knock you down without a second thought,” said Aleksandr Sapenko, a 64-year-old history teacher, citing the U.S. and European Union as Russia’s main enemies. “Soviet soldiers saved them from the Nazi gas chambers, but they are barking at Russia like a pack of stray dogs.”
- China's Currency Trap. China can't join the currency war because it doesn’t want to devalue the yuan.
- Brazil Real Leads Global Drops as Greece Damps Emerging Markets. Brazil’s real fell the most among global currencies as concern European finance ministers will struggle to agree on aid for Greece damped demand for emerging-market assets. The currency tumbled 2.4 percent to 3.0491 per U.S. dollar at 3:16 p.m. in Sao Paulo, the biggest drop among 31 major currencies tracked by Bloomberg. One-month implied volatility on options for the real, reflecting projected shifts in the exchange rate, rose for the first time in four days.
- Europe Stocks Gain Third Day as Delhaize Jumps With Ahold on M&A. Gains in retailers and miners helped European stocks post their best three-day advance since January. Delhaize Group jumped 15 percent, the most since 2003, and Royal Ahold NV rallied 5.5 percent after reports that the companies are in early stages of merger talks. Commodity producers climbed after China’s central bank cut interest rates for the third time in six months. Airbus Group NV lost 2.1 percent following the crash of a military plane. Piraeus Bank SA and Eurobank Ergasias SA lost more than 10 percent as euro-area finance ministers met to discuss bailout aid. The Stoxx Europe 600 Index rose 0.3 percent to 401.34 at the close of trading in London, reversing a decline of as much as 0.2 percent and climbing as much as 0.5 percent.
- Ex-Treasury Chief Paulson Says Low Rates Fuel Asset-Bubble Risk. Central banks that hold borrowing costs low for a prolonged period raise the risk of asset-price bubbles, former U.S. Treasury Secretary Henry Paulson said. “Until we get back to a world where interest rates are determined by real economic forces and reflect economic reality, there are going to be asset bubbles,” Paulson said Monday in an interview with Bloomberg Television in London. “There’s going to be volatility and clearly, there are bubbles, so the question is, are they manageable and how big they are.”
- America's Future Got $7 Trillion Worse Since the Financial Crisis. America's ballooning entitlement bill could lead to a more painful tax day decades from now. Driven by higher interest costs, Social Security and Medicare for baby boomers, as well as tax cuts made permanent in 2012, the federal debt held by the public is expected to hit $40 trillion in 2035, according to calculations by the Committee for a Responsible Federal Budget based on Congressional Budget Office estimates. Back in 2009, soon after President Barack Obama took office, the forecast for the 2035 burden was at least $7 trillion lower.
- OPEC Sees Oil Price Below $100 a Barrel in the Next Decade. Pessimistic Assessment May Mean That the Oil Cartel Returns to Production Quotas.
- Next Up for China’s Central Bank: How to Get Loans to Small Firms. Despite easing, banks remain reluctant to lend in sectors deemed crucial to growth.
ZeroHedge:
- Greek Cleaners 1 - 0 Troika. (pic)
- "Huge Disconnect Between Physical & Futures" Suggests Commodity Rally Won't Last, Barclays Warns. (graph)
Reuters:
- NATO - Russia has equipped Ukraine rebels to attack at short notice. NATO's chief said on Monday that Russia had built up forces on the border with Ukraine and sent more military hardware into eastern Ukraine, enabling pro-Russia separatists to launch attacks with little warning if they chose.
- Germans push for Greek referendum as IMF default is avoided. Wolfgang Schaeuble says plebiscite on Greece's euro membership could prove "helpful" as Leftist government promises to stick by "red lines".
- Troika Doesn't Expect Positive Outcomes of Greek Talks. Troika's plans on Greece during talks this week include one positive, three negative scenarios, citing a negotiator who's part of the group of ECB, European Commission, IMF.
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