Today's Headlines

Bloomberg:

• Greece, Creditors Said to Disagree on Proposals For Sales Tax. Greece’s proposed tax overhaul isn’t passing muster with the nation’s creditors because it wouldn’t do enough to help the country’s budget, people familiar with the matter said. Greek Prime Minister Alexis Tsipras told lawmakers the plan won’t gain approval from creditors and that Greece will submit a new offer in coming days, according to another person. The people asked not to be identified speaking on confidential matters.
• Merkel Gives Greece 12 Days to Reach Financing Accord. (video) German Chancellor Angela Merkel and French President Francois Hollande gave Greece until the end of May to reach a deal on its aid program, urging faster talks to end the standoff over the country’s financing. Merkel and Hollande, standing side-by-side after meeting in Berlin on Tuesday, said they would impress the message on Greek Prime Minister Alexis Tsipras when they all attend a European Union meeting in Riga, Latvia, this week.  
• ECB to Frontload Asset Purchases in May, June. (video)
• NATO Says Russian Troops Must Leave Ukraine as Truce Strains. NATO called on Russian troops to withdraw from Ukraine, while the Kremlin warned that Europe’s security would be threatened by a renewed outbreak of fighting as the fragile cease-fire came under strain. Events must be stopped from “spiraling out of control,” Jens Stoltenberg, secretary general of the North Atlantic Treaty Organization, said after talks with Russian Foreign Minister Sergei Lavrov in Brussels on Tuesday. Russia must “withdraw all its troops and support for the separatists” in eastern Ukraine, he said.
• German Investor Confidence Falls Amid Slower Growth. German investor confidence fell more than analysts forecast after growth in Europe’s largest economy slowed at the start of the year. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, fell to 41.9 in May from 53.3 in April. That’s the lowest level since December. Economists had forecast a decline to 49, according to the median of 31 estimates in a Bloomberg survey.
• U.K. Inflation Falls Below Zero for First Time Since 1960. Britain’s inflation rate fell below zero for the first time in more than half a century, as the drop in food and energy prices depressed the cost of living. Consumer prices declined 0.1 percent in April from a year earlier, the Office for National Statistics said in London on Tuesday. Economists had forecast the rate to be zero, according to the median of 35 estimates in a Bloomberg News survey. Core inflation slowed to 0.8 percent, the lowest since 2001. 
• Even the Bears May Be Too Bullish on China. Survey forecasts for several key indicators have overshot the reality so far this year. As China's economy slows, economists are proving too bullish. The median forecasts in Bloomberg surveys for industrial production, fixed-assets investment and retail sales have all overshot the reality so far in 2015.
• China Said to Ready Plans to Buoy Local Government Borrowing. China is considering relaxing rules for bond sales in a bid to boost slowing economic growth, people familiar with the matter said Tuesday. After two years of telling local authorities not to take kickbacks and don’t borrow too much, President Xi Jinping’s national government is tweaking the missive. With the economy undershooting its 7 percent growth target, the admonition against borrowing is being wound back, at least in part. China’s economic planning agency, the National Development and Reform Commission, is now seeking opinions on a draft proposal that would change rules on the bond sales it regulates in order to help investment funding, the people familiar said, asking not to be identified because the details are private. Xi and Premier Li Keqiang’s crackdown on the old, debt-fueled model of unrestrained growth have gummed up stimulus mechanisms, and restrictions on off-balance sheet financing vehicles are being relaxed. “The government is running out of choices — investment is weak not only in the property market but also in infrastructure, and the government has to do something,” Yao Wei, a Paris-based China economist at Societe Generale SA, said. While allowing local government financing vehicles to sell more bonds and telling banks to lend money to them aren’t “in line with China’s long-term reform goals, it’s necessary to address short term slowdown problems."
• Chinese Professors Charged With Economic Espionage. Six Chinese citizens, including two university professors, have been indicted on U.S. charges of pilfering sensitive mobile-phone technology from two companies in the U.S. and sharing it with the Chinese government. The charges represent the U.S. government’s latest salvo in its long-running effort to pressure Beijing to stop what American officials allege is the widespread theft of trade secrets to benefit China’s commercial and military industries. In this case, the Justice Department alleges, two Chinese researchers at U.S. companies conspired with officials at a state-run university in China to steal the wireless technology and mass produce it in their homeland.
• Goldman’s(GS) Call Sinks Petrobras as Ibovespa Leads World Declines. Goldman Sachs Group Inc.’s prediction that oil will tumble sank Petroleo Brasileiro SA, sending the Ibovespa to the biggest drop among major stock benchmarks. Oil slid for a fifth day as the New York-based firm said a continuing surplus would drag prices down to $45 a barrel by October. Petrobras, the producer at the center of Brazil’s largest graft probe, has said offshore investments are economically viable with crude above that level. The shares led losses in the Ibovespa, which retreated 1.9 percent to 55,143.62 at 12:36 p.m. in Sao Paulo. The gauge was set for the biggest slump since March. The state-owned oil company extended a two-day rout to 7.3 percent as crude decreased 2.7 percent to $57.81 a barrel in New York. 
• European Stocks Rally With Carmakers as ECB Plans to Boost QE. Stocks in Europe climbed to a three-week high after a European Central Bank official said it plans to increase bond buying in May and June. The Stoxx Europe 600 Index added 1.6 percent to 404.89 at the close of trading.

ZeroHedge: 

• Recession Check: Updating The Indicators. (graph)
• State Department To Release Hillary Emails... In January 2016!
• What The Fed's Computer Model Predicts About The Future Of The US Economy.
• Spot The Housing Starts Outlier. (graph)
• Why Chicago Bonds Are Junk, In 7 Charts. (graph)
• Chart of The Day: China Suspends Chinese Lottery Firm, CEO Resigns; Stock Rallies 25%. (graph)
• Commodity Carnage. (graph)
• ECB Blames Leak To Hedge Funds On "Internal Procedural Error". (graph)
• This Is Central Planning: A "World Of Activist Central Banks" Who "Manage Price Levels In Markets".
• Housing Starts Surge to Highest Since Nov 2007, Permits At 7 Year Highs. (graph)
• Oil Prices Will Fall: A Lesson In Gravity. (graph)
• Merkel Faces German Parliament "Revolt" On Greece.

Business Insider:

• Takata will declare 33.8 million vehicles defective due to exploding airbags.
• Wal-Mart(WMT) CEO reveals where American consumers are spending their money.
• A scary reality about Urban Outfitters'(URBN) customers: they're broke.
• The ISIS takeover of Ramadi is a game-changer.
• Here's a friendly reminder that the economic recovery has been historically bad. (graph)
• Crude oil is getting smoked. (graph)

Telegraph:

• Europe faces second revolt as Portugal's ascendant Socialists spurn austerity. Germany is worried that any concession to Greece will set off political contagion and cause fiscal discipline to collapse across southern Europe. 
• France warned to curb 'critically high' public spending by IMF. International Monetary Fund says "high and rising government spending has been at the heart of France’s fiscal problems for decades".