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[Bloomberg]( White House divisions on China, Erdogan wants control over monetary policy, and U.S. retail sales data due. Muddy waters Commerce Secretary Wilbur Ross told reporters yesterday that the U.S. is exploring [alternative punishments]( for China’s ZTE Corp. for the “inappropriate things” the company has done, saying any enforcement action would be separate from trade talks. His position seemed to be contradicted by President Donald Trump who later [drew a connection]( between any deal on ZTE and a wider trade agreement. Apple Inc. Chief Executive Officer Tim Cook said he told the president that tariffs are the [wrong approach]( to take on trade with China, while IMF Managing Director Christine Lagarde warned that a surge in protectionism would [sap global growth](. Rate grab Turkish President Recep Tayyip Erdogan said he intends to [tighten his grip]( on the economy and take more responsibility for monetary policy should he win next month’s election. In an interview with Bloomberg Television in London, Erdogan [gave his take on monetary policy]( saying “when you look at the cause and effect relationship, the interest rate is the cause and inflation is the result. The lower the interest rate is, the lower inflation will be.” The Turkish lira dropped to a [record low against the dollar]( after his comments were published. Sales U.S. retail sales data for April are due at 8:30 a.m. Eastern Time, with analysts expecting a [slowdown to 0.3 percent]( from 0.6 percent in the headline number. In today’s report, there are two major questions economists are looking for answers to: How much are tax cuts boosting spending, and to what extent are higher gasoline prices hindering it? Michelle Meyer, head of U.S. economics at Bank of America Corp., warned that colder-than-normal weather last month may prove a temporary headwind for retail sales. Markets mixed Overnight, the MSCI Asia Pacific Index lost 0.8 percent, while Tencent Holdings Ltd. was [among the biggest losers]( in the region ahead of its earnings report scheduled tomorrow. Japan’s Topix index closed broadly unchanged. In Europe, the Stoxx 600 Index was steady at 5:40 a.m. as investors awaited clarity on Italy’s government and Trump’s trade policies. S&P 500 futures pointed to a [drop at the open](, the 10-year Treasury yield was at 3.013 percent and gold was lower. European data Economic growth in the euro area was confirmed at 0.4 percent in this morning’s second reading of first-quarter GDP, with Germany’s economy growing at a [slower-than-expected 0.3 percent](. There were also signs of a slowdown in growth numbers from [central and eastern Europe](. There was brighter news in the U.K. where wage data showed that workers there got their first [real wage increase]( in more than a year and unemployment held at a 43-year low of 4.2 percent, though productivity declined. What we've been reading This is what's caught our eye over the last 24 hours - Wall Street [calls time]( on U.S. dollar’s big resurgence. - Oil may return to $100, but [this time would be different](. - China data shows a [hint of a slowdown]( while factories still hum. - What Fed officials are saying about the [flattening yield curve](. - [Wyoming]( aims to be America’s cryptocurrency capital. - Why Germans are getting [fed up with America](. - Rising oil prices matter less when you’re [importing fewer barrels](. And finally, here’s what Joe’s interested in this morning Italy is inching closer to a new government that [could bring a coalition of nationalists and populists to power.](In addition to any potential political baggage, the new government has indicated plans to slash taxes and implement a guaranteed basic income for the poor -- policy measures that could significantly widen the deficit. And yet, there's been basically no anxiety at all in the debt market, as evidenced by the Italy-Germany 10-year bond spread, which remains fairly close to its lowest levels of the decade. The lack of market reaction has been a head scratcher to some, but it probably shouldn't be. All these things like "political uncertainty" and blowing out the deficit only really matter if you perceive Italy to be a credit risk (i.e. if you perceive there to be a risk that Italy will leave the euro area or default). But very few people think that's in the cards. On the other hand, if you think of Italy as basically a sovereign a la the U.S. or Japan, then you know that a huge deficit or big debt load doesn't tell you anything about what a country's bond yields are going to be. If at some point in the future fears rise of an Italexit, then you'd expect to see that risk reflected in yields. But in the meantime, populist spending plans won't move the needle. Like Bloomberg's Five Things? 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