Market Roundup: COVID Lockdown Cares and Demand Shocks

FI futures trading firmer, just off recent highs on heavier volumes (TYM2>1.0M); yield curves flatter in the short end (2s10s -0.368 at 22.153) despite robust buying in 2s (2YY -.0981 at 2.5691). Note, 5YY -.1207 at 2.8107%.

• Market putting more weight on the demand hit rather than the inflationary pressure from further supply side disruptions on widespread Covid lockdowns prospects in China (panic selling: Shanghai CSI 300 -4.15% to 3851.80, Hang Seng -3.86% to 19809.0)
  
• Rate futures rally also tempering chances of 75bp hike market had started to price in last week -- still anticipating 50bp hikes. Fed in blackout through May 4 FOMC.
• Technicals: Firmer, but off recent high - block buy helped push 10s through resistance of 120-00.5 to 120-03. Short-term gains considered corrective as primary downtrend remains intact as moving average studies continue to point south -- fresh cycle lows last week confirmed a resumption of the primary downtrend and an extension of the price sequence of lower lows and lower highs. A resumption of the trend would open 118-02+ next, a Fibonacci projection. Initial firm resistance is at 121-09.
• Cross-assets: Gold tumbles -$36.34 (-1.88%) at $1895.10; "demand" shock tied to China lockdowns sees crude prices tumble: WTI -5.63 at 96.44).