SYDNEY, Nov 7 — US stock futures slipped in Asia today 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 per cent 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 US dollar positions, particularly against commodity sensitive currencies such as the Australian dollar.

Some of that reversed early today, with the Aussie down 0.8 per cent at US$0.6414 (RM3.05) after jumping 3 per cent on Friday. The dollar gained 0.6 per cent on the offshore yuan.

The US dollar index bounced 0.4 per cent having dived almost 2 per cent at the end of last week. The dollar edged back up to ¥147.00, while the euro eased 0.4 per cent to US$0.9920.

S&P 500 futures turned tail and fell 0.7 per cent, while Nasdaq futures lost 0.8 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.4 per cent.

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.

Four Federal Reserve policymakers on Friday indicated they would still consider a smaller interest rate hike at their next policy meeting, sounding less hawkish than Chair 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 leaning toward a half-point rate hike next month to 4.25-4.5 per cent.

"We maintain the Fed will see sufficient progress on inflation to pause at 4.75 per cent in February, but the risks are skewed to more hikes that likely bring about a recession sometime later in 2023 or early 2024,” said Bruce Kasman, head of economic research at JPMorgan.

Short-term Treasuries managed a minor rally on Friday with two-year yields edging back to 4.66 per cent and off highs not seen since 2007.

The market faces a major hurdle on Thursday when US consumer prices for October are released, with any upside surprise set to test hopes for a step down in Fed hikes.

Median forecasts are for annual CPI inflation to slow to 8.0 per cent and for the core to dip a tick to 6.5 per cent.

Also of note will be midterm US elections tomorrow where Republicans could win control of one or both chambers and lead to deadlock on fiscal policy.

In commodity markets, gold eased back to US$1,677 an ounce after jumping over 3 per cent on Friday.

Oil futures lost some of their gains with Brent off US$1.79 at US$96.78, while US crude dropped US$1.71 to US$90.90 per barrel. — Reuters