Investing.com - Copper futures were higher during European morning hours on Monday, trading at a one-week high as a sharp deterioration in Chinese manufacturing activity fuelled hopes that policymakers Beijing will act to support growth in the world’s second largest economy.
Growing speculation policymakers in the U.S. and Europe will implement fresh stimulus measures to boost growth in their respective economies further supported gains.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.486 a pound during European morning trade, gaining 0.85%.
Earlier in the day, prices rose by as much as 1.2% to hit a session high of USD3.499 a pound, the strongest level since August 27.
Data released earlier in the day showed that China’s HSBC Flash Purchasing Managers Index fell to a 41-month low of 47.6 in August from a preliminary reading of 47.8, as new orders slumped in the face of weakening global demand. The index stood at 49.3 in July.
The weak manufacturing report came after the China Federation of Logistics and Purchasing said over the weekend that its Purchasing Managers Index contracted for the first time in nine months in August, falling to 49.2 from 50.1 in July.
The disappointing data added to ongoing speculation policymakers in Beijing will cut banks’ reserve requirements or benchmark interest rates again after inflation cooled to a 30-month low in July.
The People’s Bank of China has lowered both twice so far this year in an effort to boost lending and stimulate growth.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Market sentiment remained supported after Federal Reserve Chairman Ben Bernanke indicated that the U.S. central bank could implement fresh stimulus measures to strengthen the U.S. economic recovery.
Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, on Friday, Bernanke said the persistently high rate of unemployment was a “grave concern” and reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth.
Copper traders were looking ahead to U.S. government data on non-farm payrolls on Friday, which will allow investors to gauge the strength of the faltering labor market and the need for additional easing.
The Fed’s two-day policy meeting beginning September 12 is also on investors’ minds, amid ongoing speculation over how close the U.S. central bank is to implementing more stimulus measures.
Meanwhile, expectations that the European Central Bank is working on measures to help stabilize the euro zone's sovereign debt markets ahead of its upcoming meeting on Thursday further supported gains.
Elsewhere on the Comex, gold for October delivery eased up 0.01% to trade at USD1,685.45 a troy ounce, while silver for December delivery rose 1% to trade at USD31.75 a troy ounce.
Growing speculation policymakers in the U.S. and Europe will implement fresh stimulus measures to boost growth in their respective economies further supported gains.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.486 a pound during European morning trade, gaining 0.85%.
Earlier in the day, prices rose by as much as 1.2% to hit a session high of USD3.499 a pound, the strongest level since August 27.
Data released earlier in the day showed that China’s HSBC Flash Purchasing Managers Index fell to a 41-month low of 47.6 in August from a preliminary reading of 47.8, as new orders slumped in the face of weakening global demand. The index stood at 49.3 in July.
The weak manufacturing report came after the China Federation of Logistics and Purchasing said over the weekend that its Purchasing Managers Index contracted for the first time in nine months in August, falling to 49.2 from 50.1 in July.
The disappointing data added to ongoing speculation policymakers in Beijing will cut banks’ reserve requirements or benchmark interest rates again after inflation cooled to a 30-month low in July.
The People’s Bank of China has lowered both twice so far this year in an effort to boost lending and stimulate growth.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Market sentiment remained supported after Federal Reserve Chairman Ben Bernanke indicated that the U.S. central bank could implement fresh stimulus measures to strengthen the U.S. economic recovery.
Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, on Friday, Bernanke said the persistently high rate of unemployment was a “grave concern” and reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth.
Copper traders were looking ahead to U.S. government data on non-farm payrolls on Friday, which will allow investors to gauge the strength of the faltering labor market and the need for additional easing.
The Fed’s two-day policy meeting beginning September 12 is also on investors’ minds, amid ongoing speculation over how close the U.S. central bank is to implementing more stimulus measures.
Meanwhile, expectations that the European Central Bank is working on measures to help stabilize the euro zone's sovereign debt markets ahead of its upcoming meeting on Thursday further supported gains.
Elsewhere on the Comex, gold for October delivery eased up 0.01% to trade at USD1,685.45 a troy ounce, while silver for December delivery rose 1% to trade at USD31.75 a troy ounce.