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Good morning. More votes on Brexit's direction are ahead, Chinese factory numbers look much healthier and the second quarter is setting up to be heavy on deals. Here's what's moving markets. 

“Silver Spoon”

After some very undiplomatic language from a German official who laid blame at the door of a “silver spoon” elite in Britain, the agonizing over Brexit makes a return on Monday with more indicative votes on the way. Deep divisions in the Conservative Party have sparked “pragmatic” planning for a snap election and the creation of a pro-European Union grouping to counter the powerful Brexiteer contingent. Banks think a one-year extension is more likely, a European Central Banker warns markets aren't pricing in a hard Brexit, expats in Luxembourg are worried, one fund is having success ignoring the whole thing and Angela Merkel is preparing to step in.

Health Check

Market jitters are such that it's as if recession is already a reality, with yields on U.S. Treasuries hitting levels that have caused banks to abandon rate-hike forecasts. This week, we'll get a view on whether that's actually the case given the data has yet to tangibly back that up. In Asia, expectation-busting Chinese factory numbers paint a more optimistic picture and the country showed some good will in trade talks with the U.S. In Europe, pessimism reigns with Germany's slowdown also weighing heavily on Italy. The ECB is staying cautious on what the policy response could be.

Deals, Deals, Deals

Plenty of M&A action is percolating. Peugeot owner PSA Group and Fiat Chrysler Automobiles NV are said to be considering teaming up on a new venture, only days after now-denied talk of a merger of Renault SA with Japan's Nissan Motor Co. Elsewhere, there are deals done or in the works in  data marketing, autonomous driving technology, skin health and cookies. All in the shadow of ride-sharing firm Lyft Inc.'s blockbuster IPO, already compared to Rocky Balboa and creating winners among mutual funds and potentially in startup valuations. It promises to be a busy second quarter for the deal-making community.

Erdogan's Grip

Local elections in Turkey on Sunday represented a big test of President Recep Tayyip Erdogan's hold on the country. The verdict? Mixed. Erdogan's alliance held on to rural strongholds but lost the capital and cities along the Mediterranean coast. There are also claims of manipulation in Istanbul. The lira dipped on concern the government will double down on populist policies. Turkish volatility, a central feature of 2018's stumble for emerging markets, had reared its head last week when lira funding rates rocketed to the highest in two decades before calming down, though yield-hungry Japanese retail investors long on the lira could still cause Turkey a headache.

Coming Up…

The better growth numbers from China have given stocks and oil a boost and pushed the yen lower going into Monday's session. European futures are pointing to a positive open. Beyond Brexit, there will some important PMI data for the euro area and the U.K. later this week, interest rate decisions from Australia and India's central banks, minutes from the ECB's latest meeting, a host of Fed speakers and U.S. payrolls to digest on Friday.

What We've Been Reading

This is what's caught our eye over the past 24 hours.

• Economists are terrible at forecasting recessions. How come?
• The cute mascot for Japan's government bonds.
• Six ways to stop the internet ruining your day.
• Elton John and George Clooney are calling for a boycott of some Brunei-owned hotels.
• The size of the global gender gap depends on which figures you look at.
• Wall Street's “ dirty little secret” regarding a tax dodge and ETFs.
• Data mining failure to learn the secret of success.

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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