* LME copper up 0.4 pct, Shanghai steady before U.S. data * China Jan official services PMI falls to 52.9 * Coming Up: U.S. non-farm payrolls; 1330 GMT (Updates prices) By Manolo Serapio Jr SINGAPORE, Feb 3 (Reuters) - London copper futures rose marginally in a slow Asian session on Friday as investors exercised caution ahead of key U.S. employment data. The metal is heading for its first weekly loss after three straight weeks of gains as sluggish demand from top copper consumer China and worries about Greece's drawn-out debt deal took the steam out of last week's rally to a four-month high. Three-month copper on the London Metal Exchange edged up 0.4 percent to $8,375 a tonne by 0703 GMT, but down 1.7 percent so far this week. It has been a slow return by the Chinese to the market after last week's Lunar New Year break, despite upbeat data earlier in the week that showed the country's manufacturing sector expanded slightly in January. "I don't see any upside potential for prices in the short term. The Chinese are still not happy to buy copper with prices at current levels," said Bonnie Liu, analyst at Macquarie in Shanghai. On Wednesday, government data showed China's factory activity rose in January, supporting hopes the world's No. 2 economy will avoid a hard landing. But it was a different picture for the country's services sector with official data on Friday showing it fell to 52.9 in January from 56.0 in December as property tightening measures weighed on demand. The most-traded April copper contract on the Shanghai Futures Exchange closed little changed at 59,820 yuan a tonne. All eyes will be on U.S. nonfarm payrolls data due out later on Friday. A Reuters poll points to a 150,000 increase in January after a 200,000 rise in December, with the dip mainly due to temporary workers hired during the Christmas season being laid off, according to a Reuters poll. Ahead of that data, new claims for unemployment benefits in the United States fell more than expected last week, pointing to further healing in the nation's battered jobs market. In other news, commodities trader Glencore is in talks to buy mining group Xstrata in an all-share transaction that could create a combined group worth more than 50 billion pounds ($79 billion). "This is the type of story that would normally have triggered a sharp rally in prices a few years ago, but the fact that it has hardly caused a ripple is noteworthy," said INTL FCStone analyst Edward Meir. "One reason may be due to the fact that the two companies are already intertwined, so a merger is a logical outcome for both." Glencore, the world's largest diversified commodities trader, already owns 34 percent of Xstrata and a tie-up between the two has long been expected, as Glencore aims to add more mines to its trading clout. Base metals prices at 0703 GMT Metal Last Change Pct Move YTD pct chg LME Cu 8375.00 30.00 +0.36 10.20 SHFE CU FUT APR2 59820 -60 -0.10 8.06 HG COPPER MAR2 380.10 2.00 +0.53 10.62 LME Alum 2215.50 20.50 +0.93 9.68 SHFE AL FUT APR2 16190 -80 -0.49 2.18 LME Zinc 2102.00 7.00 +0.33 13.93 SHFE ZN FUT APR2 15955 10 +0.06 7.84 LME Nickel 21000.00 150.00 +0.72 12.24 LME Lead 2177.00 13.00 +0.60 6.98 SHFE PB FUT 16145.00 20.00 +0.12 5.63 LME Tin 24100.00 -50.00 -0.21 25.52 LME/Shanghai arb^ 1947 Shanghai and COMEX contracts show most active months ^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month (Reporting by Manolo Serapio Jr.; Editing by Sugita Katyal)

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