United States

One of the primary reasons why GM files for bankruptcy back in 2009, much to the chagrin of the Obama administration not to mention the company's creditors, was because its pension and retirement benefits had become untenable (ignoring that the GM bankruptcy inverted the liquidation analysis on its head with bondholders crammed down at the expense of unions and pensioners who are a much bigger portion of the US voting population than a few bondholders on Wall Street).

The latest update on the mysterious circumstances surrounding a collision between a Philippines’ flagged container ship and a Navy destroyer that left seven sailors dead has arrived, courtesy of Reuters.

The news agency is reporting exclusively that the USS Fitzgerald ignore the much-larger cargo ship’s repeated warnings to get out of its path of travel.

One month ago, Goldman spotted a curious divergence in the energy sector: whereas in 2015 and 2016, the energy-linked asset class that had the highest beta to crude and was the most impacted as a result of the plunge in oil prices, was debt and specifically junk bonds while equities were relatively resilient to crashing crude prices, in 2017 this relationship had flipped, and - as of mid-May - despite the latest tumble in oil prices, HY Energy credits had returned 2.3% vs. 3.3% for the broader HY index, while Energy equities were down a whopping 9.6%.

It's set to be a busy week with a a jam-packed agenda for central bank watchers, with speeches due from Janet Yellen, Mario Draghi, Mark Carney, Haruhiko Kuroda and more. Economic data may also drive momentum in financial markets, with closely watched reports due on inflation, employment, manufacturing and housing from China to the U.S. We also have GDP, durable goods and consumer confidence in US, industrial production in Japan and confidence indexes in EA

Key highlights:

• Italian Bank Deal Raises Questions About Eurozone Rules (WSJ)
• UK PM May strikes $1.3 billion deal to get Northern Irish DUP support for her government (Reuters)
• Nestle Targeted by Dan Loeb in Activist’s Biggest-Ever Bet (BBG)
• Nestle 'committed' to strategy as activist investor moves in (Reuters)
• Troubled Air-Bag Maker Takata Files for Bankruptcy (WSJ)
• Merkel’s Election Opponent Slams Her for Being Too Nice to Trump (BBG)
• Berlusconi Stages Comeback to Frontline Politics (BBG)