Copper reverses five days of declines ahead of U.S., China data

Copper snapped five straight days of declines ahead of the release of key U.S. economic data on Thursday and Friday that will help investors assess when the Federal Reserve will commence scaling back its monetary stimulus. Market players also eyed Germanys industrial production figures at 11:00 GMT on Thursday and upcoming data from China on Friday and Saturday.

On the Comex division of the New York Mercantile Exchange, copper futures for settlement in December traded at $3.242 per pound at 10:08 GMT, up 0.15%. The metal traded higher throughout the day and held in range between $3.255 and $3.238 per pound. The contract lost 0.5% on Wednesday, a fifth consecutive daily retreat, but trimmed its weekly decline to less than 1.8% on Thursday.

Investors awaited the release of key U.S. economic data to gauge the red metals demand prospects and assess whether the Federal Reserve might begin tapering its monetary stimulus earlier than projected. The preliminary reading of the third quarter U.S. economic growth may show a smaller expansion compared to the preceding three months. Personal Consumption Expenditures probably fell in the third quarter, while core consumer spending is expected to have advanced. Meanwhile, the number of people who filed for initial jobless payments is expected to have fallen by 5 000 to 335 000 in the week ended November 2.

On Friday, October’s non-farm payrolls are projected to have further eased, while the unemployment rate likely inched up to 7.3%, according to analysts’ expectations. Personal income and personal spending are projected to have risen at a slower pace from a month ago. The preliminary reading of the Thomson Reuters/University of Michigan Consumer Sentiment Index may show a rebound to 74.5 in November, up from 73.2 in October.

Any better-than-expected readings of these key indicators will support the U.S. dollar by fueling speculations the Federal Reserve might begin trimming its quantitative easing program earlier than expected. A stronger greenback makes dollar-denominated raw materials more expensive for foreign currency holders and limits their appeal as an alternative investment.

Market players will also be keeping a close watch on upcoming data from Europe and China. Report on Germanys industrial production is due at 11:00 GMT on Thursday. According to analysts expectations, growth slowed down to 0.2% in September from 1.4% in August but year-on-year, output advanced by 0.8%, up from the preceding months 0.3% expansion.

China, the worlds top consumer, will announce its October trade balance figures on Friday. Data will likely show the Asian nations exports surged 3.2% last month after declining by 0.3% in September. Imports are projected to have risen by 8.5%, up from the preceding months 7.4% advance. As a result, Chinas trade surplus is expected to have widened to $23.90 billion after it fell to $15.20 billion in the previous period when exports crumbled.

On Saturday, Chinas National Bureau of Statistics is scheduled to report another batch of crucial economic data. Year-on-year, the nations consumer inflation is expected to have accelerated to 3.3% after jumping by 3.1% in the previous month, while on monthly basis the Consumer Price Index likely rose by 0.2%, slower than Septembers 0.8 advance. Meanwhile, producer inflation is projected to have slowed at a faster pace with the countrys Producer Price Index declining by 1.4%, down from 1.3% a month earlier.

The government agency is also expected to report Chinas industrial production expanded by 10.0% in October, down from 10.2% in September but retail sales growth probably inched up by 0.1% to 13.4%.

The industrial metal recently drew support after China’s Vice Premier Zhang Gaoli said earlier in the week that economic conditions are stable and that the country can meet its main economic targets this year. Chinas Communist Party leaders are scheduled to discuss policies in a four-day meeting starting November 9.