* China factory sector contraction intensifies in August * Lead forward curve tightens after large LME stock draws * ECB, Fed rate meeting in next two weeks seen as pivotal By Maytaal Angel LONDON, Sept 3 (Reuters) - Copper hit a one week high on Monday as weak factory data from China, worries over U.S. jobs growth and Europe's debt crisis cemented hopes that central banks and policy makers in the three regions will take action to boost economic growth. Three-month copper on the London Metal Exchange CMCU3 ticked up 0.79 percent to $7,670 per tonne by 0920 GMT, extending gains from the session before when it closed the month of August up 0.6 percent. It hit a one week high of $7,700 a tonne earlier. Data out earlier showed a contraction in factory sector activity in China, the world's top copper consumer, intensified in August as both output and new orders dropped while manufacturers cut prices to compete for business. China's HSBC Purchasing Managers' Index CNPMIC=ECI fell to a seasonally adjusted 47.6, its lowest level since March 2009. The data, the latest evidence of the slowdown in the world's second largest economy, precedes a Sept. 7 report on U.S. jobs growth which many investors believe is key to any decision on launching another bout of stimulus measures, especially after U.S. Federal Reserve chairman Ben Bernanke expressed concern about employment levels in the country. Bernanke on Friday left the door wide open to a further easing of monetary policy, saying the stagnation in the U.S. labour market was a "grave concern", but he stopped short of providing a clear signal of imminent action. The Fed's next rate announcement is due at its Sept. 12-13 meeting. In the eurozone meanwhile, the manufacturing sector contracted faster than previously thought last month, despite factories cutting prices, as core countries failed to provide any support, a survey showed earlier. "China PMI was weaker than expected but all that's done as with other data in the U.S. and elsewhere is to stoke more hopes of stimulus or easing, that's why commodities and metals are still hogging the recent highs," said Societe Generale analyst Robin Bhar. "It's not a good foundation for sustainable increases, it means commodities can rally but that rally will attract speculative selling." Copper prices have edged into positive territory for the year, but are still down by some 13 percent from the year's peaks hit in February, with ranges likely to be limited Monday as U.S. investors are out for the Labor Day holiday. Underpinning copper, the euro was steady against the dollar, drawing support from expectations the European Central Bank will take bold steps at its Thursday meeting to stem the debt crisis. A stronger euro makes dollar-priced metals cheaper for European investors. Markets are also expecting the ECB to release details of its new bond-buying plan to ease the region's debt crisis, which many central banks say is the prime cause of the global slowdown in economic activity. "Market players are evidently pinning their hopes on the Chinese government and central bank implementing stimulus measures. We share this view, especially given that China still has plenty of scope to take fiscal policy and monetary measures. Base metals should therefore be able to continue their upswing in the coming weeks and months," said Commerzbank in a note. Also aiding copper, market fundamentals continued to tighten. LME copper stocks fell by a hefty 4,625 tonnes to 225,275 tonnes, their lowest point since May 2012. Analysts say the decline in stocks should underpin the metal, though they warn total stocks in China, including unreported stocks in bonded warehouses, continue to rise sharply. LEAD STOCKS DROP LME lead prices have been supported by recent drawdowns from LME stocks. The spread between cash and the three-month contract on the LME hit its narrowest in four months on Friday, reflecting tightening supply that traders said was mostly consumption related. LME stocks have dropped by almost a third over the past two weeks, and this could trigger a spike in short-term prices in September, traders and warehouse officials said. Available stocks in LME-registered warehouses have slumped by around 92,000 tonnes, or 32 percent, since Aug. 13, and half of those drawdowns are due for delivery out of Singapore, draining the port of all but 1,725 tonnes of metal. MPB-SGSIN-TOT Three month lead hit a its highest since mid-May earlier, at $1,990.25 a tonne. It later traded up 1.01 percent at $1,984.25. In other metals traded, soldering metal tin rose 1.71 percent to $19,680 a tonne, while zinc, used in galvanizing jumped 1.39 percent to $1,866.50. Packaging metal aluminium edged up 0.16 percent to $1,905, while stainless-steel ingredient nickel rose 1.76 percent to $16,234. Aluminum maker Alcoa Inc. AA.N began shutting down its factory on the Italian island of Sardinia on Saturday, laying off hundreds of workers in a region already hard-hit by unemployment and economic crisis.

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