| China eases Covid testing, Saudi eyes Credit Suisse and investors brace for corporate defaults. Chinese authorities eased Covid testing requirements across major cities over the weekend. The financial hub of Shanghai scrapped PCR testing requirements to enter outdoor public venues such as parks or use public transportation starting Monday. Hangzhou, home to tech giant Alibaba Group Holding Ltd., dropped obligations to enter most public venues including offices and supermarkets. Chinese stocks rallied, while the yuan strengthened past the key 7-per-dollar level as a result. Credit Suisse shares rose more than 7% after the Wall Street Journal reported that Saudi Arabia's Crown Prince Mohammed bin Salman is preparing to invest in the lender's investment bank. Prince Mohammed may invest around $500 million in the lender's CS First Boston spinout, the newspaper said, citing people with knowledge of the matter. Other investors could include former Barclays chief executive Bob Diamond's Atlas Merchant Capital, according to the report. Watch leveraged loans for the first signs that aggressive central bank rate hikes are starting to hit companies hard. That's according to a majority of 291 respondents to the latest MLIV Pulse survey. Some investors would rather cut back on credit risk as they anticipate a greater likelihood of corporate defaults. About 28% of survey respondents expect defaults to jump significantly if US rates peak at or below 5%, which is about where the market bets the Federal Reserve will stop hiking, based on futures. US equity futures were on the back foot, with S&P 500 and Nasdaq 100 contracts down about 0.3% as of 5:07 a.m. in New York. The dollar remained near session lows, boosting most Group-of-10 currencies. Treasury yields climbed across the curve. Oil advanced, while gold was little changed. Bitcoin rose more than 1%, gaining for a second day. At 9:45 a.m., we'll get figures for S&P Global's gauge of US services. Fifteen minutes later, data on factory orders and durable goods will be published, along with ISM's measure of services. Here's what caught our eye over the weekend: Friday was an interesting day. We got a strong jobs report, and not surprisingly stocks instantly moved sharply lower, because we're still in a "good news is bad news" environment. It wasn't just that the report was strong, but the wage growth number in particular was hot, causing economists to grow more pessimistic about about soft landing hopes. Here's Paul Krugman expressing concern. Here's Jason Furman. And here's a piece from Matt Klein, who is getting more concerned about inflation becoming entrenched. All that being said, after the initial tumble, the market came back significantly. The NASDAQ had been down about 1.6% at one point in the morning, and only ended 0.18% lower. And it's worth noting that this is after powerful gains earlier in the week. Overall, the index gained 2% last week. Not bad. Anyway, what it made me think is that at least for the moment, the market is starting to give the economy the benefit of the doubt. In other words, for a while any robust datapoint in any category was seen as necessarily bad news on the inflation front, even if it wasn't an inflation measure specifically. There was no presumption of innocence. Maybe things are shifting a bit, so that the market isn't automatically taking the most bearish possible interpretation of each new number. Follow Bloomberg's Joe Weisenthal on Twitter @TheStalwart | 
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