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(Bloomberg) --

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.