5 things to start your day

[Bloomberg]( China disputes $200 deficit cut offer, Italian populists agree a program for government, and Nafta talks nowhere close to a deal. What $200 billion? China [disputed reports]( this morning that it had offered to reduce its annual trade surplus with the U.S. by $200 billion, with a foreign ministry official saying he was unaware of any such concession. However, the country is adopting a conciliatory stance in talks in Washington, which continue today, announcing the end to an[ anti-dumping probe]( into U.S. sorghum imports. While economists expect President Donald Trump will follow through with his threat to impose some of the threatened tariffs on China, they consider the likely [impact to be minimal](. Dilution solution Five Star movement leader Luigi Di Maio said his parliamentary group have [reached a deal]( on a program for government with the anti-immigrant League, with only the thorny matter of who will be prime minister still outstanding. The [details of the agreement]( signal a watering down of some highly controversial policy positions, with no mention of a euro-exit strategy and nothing on ECB debt write-offs. That hasn’t been enough to halt the selling of [Italian government debt](, with bank shares also trading lower in Milan this morning. Not even close Trump’s chief Nafta negotiator said that Mexico, the U.S. and Canada are “[nowhere near close to a deal](” to update the region’s free-trade pact. Pressure is on negotiators to resolve differences ahead of U.S. midterm elections, and Mexico’s presidential poll. The current bones of contention are perennial Nafta conflict points: the Canadian dairy market, regional car construction, and Trump’s demands to shrink the U.S. trade deficit. Negotiations will continue in Washington [on Monday](. Markets mixed Overnight, the MSCI Asia Pacific Index rose 0.2 percent, while Japan’s Topix index closed 0.4 percent higher with gains led by energy and insurance companies. In Europe, the Stoxx 600 Index was 0.1 percent lower at 5:50 a.m. Eastern Time, with Italian stocks the stand-out underperformer as the benchmark gauge in Milan dropped more than 1 percent. S&P 500 futures pointed to a [higher open](, the 10-year Treasury yield was at 3.100 percent and gold was lower. Coming up… With oil having something of a [banner week](, today’s Baker Hughes rigcount will be watched to see if the [recent run-up in activity]( to 2015 highs continues when the data are released at 1:00 p.m. Ahead of that, Dallas Fed President Robert Kaplan and Fed Governor Lael Brainard are both scheduled to speak at 9:15 a.m. in different locations. Earlier today, Federal Reserve Bank of Cleveland President Loretta Mester warned against [dismantling core banking reforms](. For the vexillophiles out there, there’s an [event inÂ](the U.K. tomorrow that may be of interest. What we've been reading This is what's caught our eye over the last 24 hours - A [warning sign for global markets]( is flashing in Japan. - Why global growth is [speeding up](, not slowing down. - Three hedge fund managers face down Wall Street’s [dollar doom](. - The world’s dominant [crypto-mining company]( wants to own AI. - [Trade chokepoints]( are making it harder to feed the world. - The U.S. army is turning to [robot soldiers](. - Senate votes to [save net neutrality](, but hurdles remain. And finally, here’s what Luke’s interested in this morning Forget 3 percent. In some ways, 0.9261 percent was the number to watch. That's where the 10-year inflation-protected Treasury yield peaked in September 2013 toward the end of the taper tantrum, a level not breached until early Thursday morning. Ten-year real rates are a favorite of Toronto-Dominion Bank's Mark McCormick (who calls them the "plumbing of capital markets") as well as Morgan Stanley's Andrew Sheets. Back in February, the latter warned that once these inflation-adjusted yields broke out of their five-year range, all hell could break loose in equities. While the push higher in real rates appeared to be at the heart of the weakness in U.S. stocks Tuesday, the breakthrough on Thursday didn't inspire a major retreat. That's intriguing, because equities had routinely come under pressure this year on occasions when the real 10-year rate ascended towards, and past, 80 basis points. In other words, rates don't matter -- until they do. By the same token, as real 10s started to make higher highs, U.S. stocks have been making higher lows -- suggesting an increase ability to cope. New River Investments' Conor Sen posits that this heightened resilience of equities could be a function of rising earnings starting to overpower the negative effect on valuations. In any case, TD Securities' Priya Misra is betting that the headwind that rising real yields generate for stocks (a higher discount rate for future earnings streams) is poised to abate. She sees the 10-year real rate sinking back to 70 basis points, citing scepticism equilibrium real rates have "fundamentally risen." 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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