Italy’s political crisis poses risks for the global economy: NY Times
Asian stocks extend losses after sharp drop in US equities: Reuters
Trump announces US moving ahead with trade tariffs on China: New York Mag
China says it will respond to ‘reckless’ US trade threats: Reuters
US home prices rose a solid 6.8% in March from year-earlier level: USA Today
Texas factory activity increased in May, reaching a 12-year high: Bond Buyer
US Consumer Confidence Index up in May, close to 18-year high: MarketWatch

The US stock market has been on a roller coaster for much of 2018, but the surge in volatility hasn’t derailed momentum’s leadership for US equity factors, based on a set of proxy ETFs.
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N. Korea sends top aide to US for pre-summit talks: Bloomberg
Trump presses aides to move ahead with US-N. Korea summit: CNN
Russia says reports of US troops in Poland could bring “counteraction”: Newsweek
Italy’s political crisis triggers heavy selling in European markets: Reuters
OECD chief: global growth still needs fiscal-policy support: CNBC
NY Fed’s nowcast for Q2 GDP growth ticks down to still-solid 3.01% rise: NY Fed
Oil prices set for longest run of losses since February: Bloomberg
German 10-year government bond yield falls to new 2018 low:

It’s Memorial Day in the US — a day to honor the men and women in the military who paid the ultimate price to serve and defend their country. It’s also the perfect day for Americans to honor the wounded vets who made it home. Please consider a donation to your favorite charity that supports veterans or:

Disabled American Veterans
Paralyzed Veterans of America

To all the American Vets… thank you for your service!

Real estate investment trusts (REITs) posted the strongest gain for the major asset classes last week, based on a set of exchange-traded products.
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S. Korea calls for more talks with North; US planning Trump-Kim meeting: Reuters
Political crisis erupts in Italy amid calls for impeaching president: BBC
Italy names former IMF official as interim prime minister: Reuters
China sends ships to confront US Navy near disputed islands in S. China Sea: Time
China-Iran summit planned to avoid disruption amid nuclear deal doubt: Reuters
US durable goods orders fell in Apr, mainly due to drop in aircraft orders: MW
US consumer sentiment holds steady in May at elevated level: WSJ
Oil prices tumble on concerns of rising supply: MW
World trade volume: sharp slowdown in annual growth to 2.1% in March: CPB

● Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State
By Paul Tucker
Review via Reuters Breakingviews
How much influence should central bankers wield in a democracy? That’s the question Paul Tucker ponders in “Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State”… Central bankers are being sucked into deeply political decisions over how the government is financed, and how income is distributed. Yet these “overmighty citizens” have no electoral legitimacy. At the same time, frustrated voters in the West have turned to demagogues. As a result, central bank independence is under threat.
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Is Fertility a Leading Economic Indicator?
Kasey Buckles (University of Notre Dame), at al.
March 28, 2018
Many papers show that aggregate fertility is pro-cyclical over the business cycle. In this paper we do something else: using data on more than 100 million births and focusing on within-year changes in fertility, we show that for recent recessions in the United States, the growth rate for conceptions begins to fall several quarters prior to economic decline. Our findings suggest that fertility behavior is more forward-looking and sensitive to changes in short-run expectations about the economy than previously thought.
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Trump cancels N. Korea meeting and China stands to benefit: NY Times
Taiwan scrambles jets as Chinese bombers circle island: Reuters
EU official: UK ‘chasing a fantasy’ in Brexit talks: Guardian
Revised UK GDP data for Q1 remains at sluggish +0.1%: Bloomberg
Mexican president is ‘optimistic’ as country makes new NAFTA offer: Reuters
Big tech faces big lawsuits as Europe’s new data protection law kicks in: CNN
ECB minutes: Euro zone growth could slow further: Reuters
US existing home sales fall in Apr; y-o-y change is negative for 2nd month: Builder
US jobless claims increase to 7-week high: MarketWatch
Kansas City Fed Mfg Index rises to new record high in May: KC Fed
2018 Atlantic hurricane season expected to be near- or above-normal: NOAA

The Federal Reserve is prepared to let inflation run above its two-percent target, according to the minutes of its policy meeting held earlier this month. The bond market appears comfortable with the news: the implied inflation forecast (based on the yield spread between nominal and inflation-indexed Treasuries) ticked down yesterday, reaching the lowest level in over a month for the 10-year maturities. Meanwhile, the crowd continues to bet that the central bank will continue to raise interest rates, including a hike at next month’s FOMC meeting. A period of dovish tightening, in other words, prevails.
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