U.S. stock futures fell in Asia on Monday after Beijing denied it was considering scaling back its COVID-19 policy, helping the dollar recoup some losses as oil and commodities retreated.
Risk stocks rallied on Friday amid speculation that China was preparing to relax its pandemic restrictions, but over the weekend health officials reiterated their commitment to a “dynamic cleanup” approach to COVID cases as they emerge. make a. Tapas Strickland, head of market economics at NAB, said, “Despite the denial, notions that China will live with COVID in the new year are unlikely to be dispelled given the very real toll that zero-Covid is having on the economy. .”
“As China heads into winter, most analysts think a change to zero-Covid is unlikely until at least March.” Speculation that China may reopen its economy saw copper rise 7 percent on Friday in its biggest one-day rally since 2009, while a range of sources all benefited from expectations of increased demand. receive
The yuan also rose, leading to gains on long US dollar positions, particularly against commodity-sensitive currencies such as the Australian dollar. A bit of that was reversed on Monday, with the Aussie down 0.4% to $0.6440
The US dollar index rose 0.4% and was down almost 2% at the end of last week. The dollar was earlier at 146.77 yen against the yen, while the euro was slightly lower at 0.9944 dollars. S&P 500 futures reversed and fell 0.5%, while Nasdaq futures lost 0.6%.
Apple Inc said on Sunday that it expects shipments of the iPhone 14 Pro and iPhone Pro Max to be lower than previously expected, as COVID-19 restrictions temporarily halt production as Beijing’s tough policies take a toll on costs. Still, investors hoped there might be something to the China slowdown story and MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3%.
Japan’s Nikkei rose 0.6% and South Korea’s 0.3%. The market is now waiting for Chinese trade data that will be later in the session for a guide on global demand. US CPI ON THE LOOMS
Aiding risk sentiment on the sidelines, the White House is reportedly encouraging Ukraine in particular to show openness to talks with Russia. Traders still saw a mixed U.S. jobs report showing solid gains in the payrolls survey, but softening in the less reliable household unemployment survey.
Four Federal Reserve policymakers indicated on Friday that they would still consider a smaller interest rate hike at their next policy meeting, appearing less vocal than Chairman Jerome Powell. There are at least seven Fed officials scheduled to speak this week, which will help refine the rate outlook with markets now narrowly targeting a half-point rate hike next month to 4.25-4.5%.
“We maintain that the Fed will see enough progress on inflation to hold it at 4.75% in February, but risks are on the upside that a further rate hike could occur in 2023 or early 2024. ” said Bruce Kasman, head of economic research. at JPMorgan. Short-term Treasuries edged lower on Friday, bringing the two-year yield back to 4.68% and levels not seen since 2007.
The market faces a major hurdle on Thursday when US consumer prices for October are released, with any upside surprise meant to test expectations for a move in Fed rate hikes. Average forecasts are for annual CPI inflation to slow to 8.0% and for core to decline to 6.5%.
Also of interest will be Tuesday’s US midterm elections where Republicans could win control of one or both chambers and block fiscal policy. In commodity markets, gold fell back to $1,673 an ounce after rising more than 3% on Friday.
Oil futures lost some of their gains with Brent down $1.66 at $96.91 and US crude fell $1.85 to $90.76 a barrel.
(This story has not been edited by Devdiscourse staff and is automatically generated from a combined feed.)