Hong Kong stocks jump more than 3% ahead of China’s Covid briefing

China’s state council is expected to deliver a positive message at the upcoming Covid press conference, but the announcement will not include a “milestone,” said Pinpoint Asset Management’s President Zhiwei Zhang.

“I think the message would be positive actually … there are quite many positive signals coming from the central and local governments,” said Zhang, who cited examples such as the government allowing residential compounds in Beijing to be opened.

However, he cautioned that the reopening will be a “long process” all the way leading up to March next year, and said the “medical system may not be able to support the transition” especially for the immediate winter season. 

— Lee Ying Shan

Both the onshore and offshore Chinese yuan strengthened against the dollar in Asia’s session ahead of a press conference on Covid measures.

The greenback lost 1.09% against the offshore yuan and 0.65% against the onshore yuan, with both trading around 7.16-levels. The offshore yuan traded near 7.24 per dollar before it strengthened sharply.

Other Asia-Pacific currencies also gained against the dollar. The Australian dollar was up at $0.6701 after jumping from around $0.66-levels, and the Korean won was at 1,326.79 per dollar compared with around 1,340 earlier on Tuesday.

— Abigail Ng

Indexes in China jumped more than 2% as investors closely watched for developments in the nation’s zero-Covid policy after seeing losses in the previous session.

China’s CSI 300 index rose 2.97% in the morning session, while the Shanghai Composite climbed 2.2%. The Shenzhen Component Index gained 2.172%.

Local media reported that the Chinese State Council will hold a press conference on Covid measures at 3 p.m. local time, or 2 a.m. ET.

The nation saw a drop in the number of daily infections for the first time in more than a week.

– Evelyn Cheng, Jihye Lee

Chinese President Xi Jinping has been realistic and practical on Covid, domestic real estate issues and politics since the end of the Communist Party of China’s National Congress, said Andy Rothman, an investment strategist at Matthews Asia.

“He’s been pragmatic on Covid policy, announcing a change in direction more towards living with Covid rather than Covid zero,” he said on CNBC’s “Squawk Box Asia” when asked about how the government might respond to recent unrest in parts of China.

“He’s been pragmatic on property, he’s been very pragmatic on dealing with Joe Biden, so I expect that to continue,” Rothman said.

He added that he views the unrests related to the prolonged zero-Covid policies as largely in line with what is expected to come from the Chinese government.

“What the protesters seem to be asking for, are things Xi Jinping has already said he wants to deliver,” he said. “He wants to deliver a path out of zero tolerance for Covid, towards living with Covid like all the rest of the world.”

Rothman added that the latest announcements to ease quarantine measures for international travelers suggests that delivering shifts from the zero-Covid policy will be “relatively easier.”

“He’s not backing down, [or] giving in under pressure, he’s just delivering, on a more accelerated pace, what he’s already told these students that he wants to give them,” he said.

— Abigail Ng

Oil prices climbed ahead of a press conference which will be held by China’s State Council, as investors continue to monitor developments – paring some losses seen on Monday, when it reached the lowest levels in almost a year.

The West Texas Intermediate futures climbed up 1.76% to stand at $78.59 per barrel, while the Brent crude futures climbed 2.28% to stand at $85.00 per barrel.

However, oil markets may be “misjudging news of China’s lockdown,” Rystad Energy wrote in a note.

“[The latest lockdowns’] likely effect on China’s short-term oil demand, particularly in transportation, is likely to be minor,” the note added, citing the company’s own research of real-traffic activity in China.

Even with daily Covid cases continuing to climb, cities like Shanghai have not shown a slowdown in road traffic activity, according to Rystad Energy’s own research.

— Lee Ying Shan

The Chinese government is unlikely to make sudden changes to its zero-Covid policy as that will bring chaos, National University of Singapore Professor Wang Gungwu said on CNBC’s “Squawk Box Asia.”

“If you change the policy suddenly, I think the damage and the consequences would be even worse — it’d be really chaotic because I think the spread of Covid will be absolutely unprecedented,”…