FX:Copper edges higher on Spain bailout hopes, China GDP eyed
Forexpros - Copper futures edged higher during European morning hours on Tuesday, as the U.S. dollar weakened on reports Spain was moving closer to requesting a bailout.
Gains were limited as investors were hesitant to push up prices too high ahead of the release of highly-anticipated Chinese economic growth data later in the week.
On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.707 a pound during European morning trade, easing up 0.15%.
Earlier in the day, prices rose by as much as 0.6% to hit a session high of USD3.724 a pound.
Investors continued to hope that Spain will formally request a bailout in the coming weeks and activate a bond buying program by the European Central Bank.
The Wall Street Journal and Financial Times each cited an unnamed Spanish official in separate reports Monday as saying Madrid is ready to request a credit line from the ECB.
Market players have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.
A bailout would allow the ECB to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.
European Union policymakers will hold a two-day summit in Brussels starting on Thursday to discuss ways to firewall and extinguish the debt crisis as well as Greece's steps towards fiscal recovery.
Copper traders looked ahead to Chinese third quarter growth figures due out on Thursday to gauge whether the world second largest economy is heading towards a hard or a soft landing.
Market analysts expect the data to show China's annual growth slowed for a seventh straight quarter in the July-September period to the weakest level since the depths of the 2009 global financial crisis.
Official data released Monday showed that Chinese consumer prices rose 1.9% in September from the year-ago period, in line with expectations and down from 2.0% in August, while producer price inflation fell 3.6%, also in line with expectations.
The data came after a report over the weekend showed that Chinese exports grew 9.9% on the year in September, above expectations for a 5.5% gain and increasing from 2.7% in August. Imports rose 2.4% from a year earlier, in line with expectations.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Elsewhere on the Comex, gold for December delivery added 0.15% to trade at USD1,740.35 a troy ounce, while silver for December delivery rose 0.35% to trade at USD32.85 a troy ounce.
