5 Things You Need to Know to Start Your Day

More US banks get downgraded, China steps up its currency defense and deepfakes spark a wave of financial crime. — Kristine Aquino S&P Globa [View in browser]( [Bloomberg]( More US banks get downgraded, China steps up its currency defense and deepfakes spark a wave of financial crime. — [Kristine Aquino]( Bank downgrades [S&P Global Ratings downgraded ratings for several US banks]( including KeyCorp and Comerica, two weeks after Moody’s Investors Service cut ratings for 10 American lenders. Many depositors have “shifted their funds into higher-interest-bearing accounts, increasing banks’ funding costs,” S&P wrote in a note summarizing the moves. Non-interest-bearing deposits have fallen 23% in the past five quarters, according to S&P, as a spree of Federal Reserve rate hikes prompted consumers to seek higher deposit rates elsewhere. China v bears [China escalated the defense of its currency]( by making it more expensive for investors to bet on declines. While the central bank is easing monetary policy, it is also trying to slow yuan losses with stronger-than-expected fixings, dollar sales by state banks, and measures such as tweaking rules on capital flows. Yet strategists at JPMorgan, Nomura and UBS Wealth Management continue to see further weakness in the currency, which is approaching its year-to-date low in the offshore market. Deepfake troubles [The explosion of artificial intelligence is also creating a boom in financial crime](. AI in particular is  being used to “turbocharge” fraud, US Federal Trade Commission Chair Lina Khan warned in June. As major banks step up counterefforts, the cost of cybercrime is set to hit $8 trillion this year and $10.5 trillion by 2025. “It’s an arms race,” says James Roberts, who heads up fraud management at Commonwealth Bank of Australia, the country’s biggest bank. “It would be a stretch to say that we’re winning.” Risk on S&P 500 futures climbed 0.4% as of 6:10 a.m. in New York, while Nasdaq 100 contracts rose 0.5%. The Bloomberg Dollar Spot Index traded near the day’s lows, boosting all Group-of-10 currencies. Treasury yields dipped, with the 10-year rate pulling back from a 16-year high seen earlier. Gold climbed for a second day, while oil and Bitcoin pulled back. Coming up… At 7:30 a.m., Richmond Fed President Tom Barkin will speak at an event, while Chicago Fed President Austan Goolsbee will deliver remarks at 2:30 p.m. An hour later, Goolsbee, along with Fed Governor Michelle Bowman, will participate in a fireside chat.  At 10 a.m., we’ll get data on existing home sales, as well as the latest reading for the Richmond Fed’s manufacturing gauge. How big do you expect the magnitude of China's stimulus to be this year? Will further declines in Chinese stocks lead to a global equities selloff? Share your thoughts on Chinese assets in the latest [MLIV Pulse survey](. What we’ve been reading This is what’s caught our eye over the past 24 hours: - SoftBank’s Arm files for what’s likely to be [this year’s biggest IPOÂ]( - [A sudden rally in China stocks]( has traders scratching their heads - UK stocks finally get a break after their [longest string of losses since 2019]( - [Dollar-dependent no more](: what’s on the agenda for the BRICS summit - [Rolex thefts are on the rise](with £1 billion worth of watches stolen - Billionaire owner of the San Francisco Giants[battles a clam shack]( - The[best new books on economicsÂ](  And finally, here's what Joe’s interested in this morning… Jackson Hole starts in two days, and it feels it's just in time as things get interesting again. Two or three weeks ago, we were probably at peak 'soft landing' optimism. Lately though, there's been a whiff of 'no landing' again or maybe 'bumpy landing'. For one thing, as everyone knows, the economic data lately has been much stronger than people would have imagined, given the pace of rate hikes. Meanwhile, there's starting to be talk again about upward pressure on inflation. Yesterday in a note, Citi economists Veronica Clark and Andrew Hollenhorst wrote that "upside risks to our 2024 inflation forecasts are rising again." The pair cited robust demand for goods, the end of supply-chain healing, rising commodity costs, and evidence of firming in used cars. Meanwhile, Goldman economists Spencer Hill and David Mericle published a note Friday arguing that "the last two CPI reports overstate the slowing in the core and especially in the heavily scrutinized core services ex-housing aggregate, where residual seasonality and health insurance have made negative contributions that we judge will soon turn around." There's a growing sense that there's still some heat in this economy. Meanwhile, this chart kind of tells the story from the markets perspective. Two-year yields are back above 5% again, as the markets price in less short-term easing. Meanwhile, regional banks have been weak again, and basically are right at their levels from when SVB imploded. So like I said, things are getting interesting again in time for Jackson Hole. 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](. 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. 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