In This Article:
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Asian stock markets : https://tmsnrt.rs/2zpUAr4
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Beijing reaffirms strict pandemic rules
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S&P 500, Nasdaq futures give back some ground
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Oil retreats with commodities
By Wayne Cole
SYDNEY, Nov 7 (Reuters) - U.S. stock futures slipped in Asia on Monday after Beijing denied it was considering easing its zero COVID-19 policy, helping the dollar recover some losses while dealing a setback to oil and commodities.
Risk assets had rallied on Friday amid speculation China was preparing to relax its pandemic restrictions, but over the weekend health officials reiterated their commitment to the "dynamic-clearing" approach to COVID cases as soon as they emerge.
"Despite the denial, notions that China will pivot to living with COVID in the new year are unlikely to be quashed given the very real toll that zero-COVID is having on the economy," said Tapas Strickland, head of market economics at NAB.
"With China going into winter, most analysts think a change in zero-COVID is unlikely until at least March."
Speculation that China might open its economy saw copper jump 7% on Friday in its biggest one-day rally since 2009, while a range of resources all benefited from hopes of increased demand.
It also sent the yuan surging and triggered a round of profit taking on long U.S. dollar positions, particularly against commodity sensitive currencies such as the Australian dollar.
A little of that reversed on Monday, with the Aussie down 0.4% at $0.6440 after jumping 3% on Friday. The dollar gained 0.9% on the offshore yuan.
The U.S. dollar index bounced 0.4% having dived almost 2% at the end of last week. The dollar was just a shade former on the yen at 146.77 yen, while the euro eased a fraction to $0.9944.
S&P 500 futures turned tail and fell 0.5%, while Nasdaq futures lost 0.6%.
Illustrating the costs of Beijing's strict policies, Apple Inc on Sunday said it expects lower iPhone 14 Pro and iPhone Pro Max shipments than previously anticipated as COVID-19 restrictions temporarily disrupt production.
Still, investors seemed to hope there might be something to the China loosening story and MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3%.
Japan's Nikkei rose 0.6% and South Korea 0.3%. Markets are now waiting on Chinese trade data due later in the session for a guide on global demand.
U.S. CPI LOOMS
Aiding risk sentiment at the margin were reports the White House is privately encouraging Ukraine to signal an openness to negotiate with Russia.
Dealers were still digesting a mixed U.S jobs report which showed solid gains in the payrolls survey but softness in the less reliable household survey of unemployment.