| Welcome to your morning markets update, delivered every weekday before the European open. Good morning. There's friction over Europe's reopening plans, growing tensions between the U.S. and China and airline bailouts are moving closer. Here's what's moving markets. Easing Friction Virus deaths continue to decline in Europe, increasing the friction between governments who want to avoid the risk of a second wave of infections shutting down countries again and businesses who need the economy to reopen in order to stay afloat. The first easing steps in Italy will take place on Monday and Prime Minister Giuseppe Conte is facing a growing revolt from opposition politicians and business being left out of the initial moves. The U.K. is due to set out plans to ease restrictions this week with a gradual approach expected and it will also start free-trade talks with the U.S. as Brexit forges on despite the disruption. Tensions Tensions between the U.S. and China are likely to escalate after Mike Pompeo, the U.S. Secretary of State, said there is "enormous evidence" that the novel coronavirus originated in a lab in Wuhan and President Donald Trump said that a "conclusive" report on the Chinese origins of the virus will be forthcoming. The U.S. domestic response to the outbreak remains heavily in focus, particularly with a brutal payrolls report expected on Friday and with the U.S. Treasury due to outline unprecedented fundraising plans to pay for the stimulus being pumped in to the economy. Rescues Airlines, among sectors hit hardest by global lockdowns, are inching closer to securing the bailouts they require. Deutsche Lufthansa AG is expected to finalize a package with the German government "soon" and Norwegian Air Shuttle ASA is getting closer to a deal with bondholders which would secure it state loan guarantees. Plane maker Airbus SE, meanwhile, said it has no immediate need for state support. Tour operator TUI AG's Chinese unit has started offering flights again, providing a case study for other airlines of a gradual restart of operations. Momentum The question of whether the momentum in risk assets seen in April can continue this month will be front of mind for traders, as any optimism from the stimulus being pumped in is offset by myriad worries about a possible second wave of infections, weak corporate earnings and U.S.-China tensions. Emerging markets -- which have historically not performed well in May -- face a big test, while there are also worries about inflation returning with a vengeance and oil markets are at the start of a long road toward recovery. Coming Up… Stocks in Asia fell and European and U.S. stock futures are lower going into Monday, indicating that the switch to negative momentum will continue in the near-term at least. Oil is falling once more as the glut of crude in the world outweighs any optimism about a return in demand. Euro-area manufacturing PMIs are due for yet more evidence of the blow the outbreak has dealt to output. Topping the earnings calendar will be luxury sports car maker Ferrari SpA. What We've Been Reading This is what's caught our eye over the weekend. And finally, here's what Mark Cudmore is interested in this morning Sell in May and stay in lockdown — a market cliché gets a makeover and appears more apt than ever. There are no shortage of catalysts: shocking economic data, lockdowns being eased more slowly than some had hoped, earnings negativity, a business environment so bad that even Amazon (the supposed beneficiary of our new lifestyles) may not make money this quarter and now the threat of escalating tensions between the U.S. and China. Who needs to be guided by seasonality when fundamentals make the negative case so clear? Even Warren Buffet struck a relatively downbeat tone compared to normal at the Berkshire Hathaway (virtual) AGM. And, like kicking a benchmark index when it's down, the technicians will get very excited pointing out that the April rebound in the S&P 500 stopped exactly where it should — just below the much-hyped 61.8%-Fibonacci retracement level. So will this month see a retest of the March lows or just a shallow pullback before the next leg higher?  Mark Cudmore is a Bloomberg macro strategist and the Managing Editor of the Markets Live blog. Bloomberg Terminal users can follow him there at MLIV Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. | 
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