5 Things You Need to Know to Start Your Day

Biden is left red-faced over the biggest intelligence leak in a decade, the US is pressing the need for G-7 allies to coordinate against eco [View in browser]( [Bloomberg]( Biden is left red-faced over the biggest intelligence leak in a decade, the US is pressing the need for G-7 allies to coordinate against economic coercion and China megabanks plan a multi-billion yuan funding spree.  — [David Goodman]( US embarrassment The Biden administration is going to have a [hard time explaining how]( the biggest US intelligence leak in a decade may have been committed by a 21-year-old airman whose role — “cyber transport systems journeyman” — required a high-school degree, a driver’s license and up to 18 months of on-the-job-training. The FBI arrested Jack Teixeira, of Dighton, Massachusetts, on Thursday, with the promise of a swift arraignment on Friday. As Pentagon jobs go, Teixeira’s was pretty junior. An Air Force job description says workers like him “keep our communications systems up and running and play an integral role in our continuing success.” He joined the Air National Guard in 2019, according to his service record. As Peter Martin, Courtney McBride and Tony Capaccio wrote, that will raise the inevitable question: If a low-level Defense Department employee has access to such sensitive information, who doesn’t? Push back The US is pressing the need for allies to [coordinate against economic coercion](, not just military threats, as Japan prepares to host top diplomats from the Group of Seven nations amid heightened tensions with China. “That coercion piece is important,” US Ambassador to Tokyo Rahm Emanuel said in an interview days before the ministerial meeting begins in the mountain resort of Karuizawa on Sunday. “It keeps the United States in the center of gravity and helps our allies and alliance and our friends to know that we are in the game.” China megabanks China’s megabanks are planning at least 40 billion yuan ($5.8 billion) of bond sales, kicking off a [major funding push]( to comply with global capital requirements by early 2025. Industrial & Commercial Bank of China and its three closest rivals are planning to tap domestic debt markets to sell a new category of total loss-absorbing capacity bonds as soon as June, according to people familiar with the matter. The exact amounts haven’t been finalized, but each bank is targeting at least 10 billion yuan, said the people. Steady markets Global markets steadied on Friday [amid speculation]( the Federal Reserve and other central banks are nearing the end of their hiking cycles. Europe’s Stoxx 600 was set for a fourth straight weekly advance, its longest since Dec. 2, while MSCI Inc.’s World Index rose for a second day, headed for its highest close in 10 weeks. Contracts on the S&P 500 were flat after the gauge climbed the most this month on Thursday. Treasuries edged higher.. Coming up… The US is set for a slew of reports this morning, covering import prices, retail sales and sentiment. There are also two back-to-back appearances from Federal Reserve officials, with Chicago Fed President Austan Goolsbee interviewed on CNBC at 8:30 a.m. and Christopher Waller due to discus the economic outlook at an event in Texas just fifteen minutes later. What we’ve been reading Here’s what caught our eye over the past 24 hours: - UK assets are in the middle [of a hot streak.]( - Singapore is latest to [halt policy tightening]( as GDP shrinks,. - Another Covid-like pandemic could hit the world within [10 years](. - Hermes sales jump as China, US shoppers [snap up Kelly bags](. - The once-mighty eurodollar futures contract will soon be [no more](. - Arnault is[streaking away](from Musk as world’s richest person. - Some[terrifying rat tales](for New York’s new rat czar. And finally, here’s what Garfield’s interested in this morning Mark May 3 in your calendar now. That’s when traders expect the Federal Reserve to hike rates for the last time in this tightening cycle. Despite repeated pushback from central bankers, the market is now betting on three rate cuts this year from that peak, firm in the belief a US recession is looming. It’s not just traders expecting the economy to get worse, with four-out-of-five participants in a survey by the International Association of Credit Portfolio Managers expecting a US recession in 2023 and a rise in corporate defaults. That poll comes as the US junk bond market shrank to $1.41 trillion, down 11% from its peak in October 2021. These forecasts of economic gloom have investors on the hunt for bond markets primed to outperform if the global rate-hike cycle is indeed close to a peak. A sale of benchmark UK bonds attracted the strongest demand in more than two years, amid speculation the Bank of England’s just about done with hikes. And BlackRock Inc. is among those looking to Malaysia, seeking to profit from possible signs of peak interest rates and an attractive yield pickup. Follow Bloomberg's Garfield Reynolds on Twitter [@]([GarfieldR1966]( or read [the Weekly Fix]( here. 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](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](