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Inflation warning, no oil veto and the MLIV Pulse survey.Inflation testSeemingly no other number matters nearly as much to the markets as in [View in browser]( [Bloomberg]( Inflation warning, no oil veto and the MLIV Pulse survey. Inflation test Seemingly no other number matters nearly as much to the markets as [inflation]( these days — and traders are braced for fresh data tomorrow and President Joe Biden’s assessment later today. The U.S. headline number is running way above the Federal Reserve's inflation target, but there may be respite: economists forecast the annual print for April to come in at 8.1%. While that may be inordinately high, that would still mark a cooling of pressure. Meanwhile, the Fed has warned of a risk of [tightening liquidity]( across key financial markets amid the war in Ukraine and monetary policy. Oil veto EU talks about a Russia oil ban continue with Hungary coming under increasing pressure [not to use its veto]( on the plan. Oil [slumped]( after the bloc softened its sanctions proposal, [scrapping a proposal]( to ban European-owned vessels from carrying Russian crude. The European Bank for Reconstruction and Development said it expects Ukraine's economy to shrink by [30% this year](, assuming the war ends. The EU is weighing [joint debt issuance]( to provide funds to the country to help fill Kyiv's $7 billion a month budget gap. Biden signed into law a measure that will [speed U.S. weapon deliveries]( to Ukraine, while Democrats have drafted a [$40 billion aid package](. MLIV Pulse Survey Queen Elizabeth II will miss the [state opening]( of Parliament for only the third time on Tuesday, casting a shadow over Prime Minister Boris Johnson’s attempt to reboot his flagging U.K. premiership. Many U.K. assets have struggled and the Bank of England last week gave the most pessimistic outlook of any major central bank. So it’s fitting that the U.K. is the theme of this week’s MLIV Pulse survey. What levels are next for the pound and U.K. yields? Which central bank has been best at policy communication and forward guidance during the global inflation crisis? [Click here]( to participate. Stocks recover It's a [good day for stocks]( (so far). Gains across Europe extended with most equity indexes recovering roughly half of Monday's selloff. Gains are broad based, but led by construction, auto and banking sectors. S&P futures added over 1% as of 5:40 a.m. in New York. Bonds drifted higher with the U.K. outperforming. The dollar traded either side of unchanged in a relatively quiet session for FX. Crude futures reversed a small push higher to trade down over 1%, and spot gold held Asia's gains near $1,860/oz. Coming up... Biden is due to speak about inflation at 11:30 a.m. The line-up of scheduled Fed speakers includes John Williams at 7.40 a.m., followed by Thomas Barkin, Christopher Waller, Neel Kashkari and Loretta Mester. We also have a trio of ECB speakers on the docket. Note that Senate Democrats are expected to hold votes to confirm Lisa Cook's nomination to be a Fed governor today, with earlier opportunities to vote delayed due to Covid cases. Today's 1:00 p.m. bond auction includes $45 billion of 3-year notes. Sysco Corp., Warner Music Group Corp., Electronic Arts Inc. and Fox Corp. are among the companies reporting earnings. What we've been reading Here's what caught our eye over the past 24 hours. - Democrats weigh [$40 billion for Ukraine](. - Russian envoy hit with [red paint](. - Europe shouldn’t target [zero Russian oil](. - Tips from [the ultimate traveller](. - [Big green truck](. - [Stablecoin experiment crumbles](. - Inflation stands in the way of [America’s summer travel plans](. And finally, here’s what Joe’s interested in this morning There's not a whole lot that feels novel to say right now about this market. The stock selloff has been absolutely punishing, and it's definitely not confined to just tech. The popular energy ETF XLE fell a staggering 8% yesterday. Up until last week, crypto had actually been outperforming on the downside, which was really weird, given its higher vol. Well now that's being taken care of, with that outperformance gone. There was a certain panic in the air yesterday that didn't seem to be present throughout the selloff so far. And this leads to one interesting thing that made yesterday different, which is that we finally saw a bid come into bonds. 10-year Treasury yields, which had gotten to around 3.2% came in a bit, moving closer to 3% on the day. Perhaps more importantly, 2-year yields also came in. They had been around 2.75%, before moving to around 2.6%. It's this short end which most clearly represents the near-term Fed trajectory, and up until now, there was no indication that anything happening in the stock market or the real economy would slow the pace of hikes. Finally that's being tested a little bit. Whether it's the market itself, or things happening in the "real economy" (such as signs of a [slowdown in housing/construction]() for the first time in a while, there are tiny hints that the Fed may dial back some of its hiking plans, at least a little bit. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. 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