Tue Jul 24, 2012 12:23am EDT
* LME Copper jumps more than 1 pct after China PMI data * HSBC flash China manufacturing PMI grew at fastest in 9 mths * Spanish bond yields hit euro-era high above 7.5 pct * Moody's cuts Germany's outlook to negative * Coming up: Redbook weekly U.S. retail sales; 1255 GMT (Updates prices, adds quotes, details) By Carrie Ho SHANGHAI, July 24 (Reuters) - London copper rebounded on Tuesday after better-than-expected July manufacturing output in top metals consumer China temporarily offset investor worries that Spain's debt problems would undermine global demand for metals. The HSBC Flash China manufacturing purchasing managers index (PMI) rose to 49.5 in July from 48.2 in June, growing at the fastest pace in nine months and nearing the 50 level that divides expansion from contraction. "China's PMI data beat market expectations and gave shorts a reason to cover today," said Orient Futures derivatives director Andy Du. The news helped three-month copper on the London Metal Exchange jump 1.1 percent to $7,485 per tonne, before giving up some gains to trade at $7,471 by 0346 GMT. The contract had dipped to the lowest level since June 28 on Monday after news that Spain might need to resort to a full sovereign bailout. The most active November copper contract on the Shanghai Futures Exchange gained 0.4 percent to 54,610 yuan ($8,600) per tonne after falling to the lowest since June 29 in the previous session. "But underlying sentiment is still bearish, given the fragile state of the global economy, and we are not taking our eyes off developments in the euro zone," said Du, signalling that gains may be capped worries over the troubled bloc. Spain's economy sank deeper into recession in the second quarter, its central bank said on Monday, as a funding crisis in its regions pushed the country closer to a full bailout and with Spanish bond yields at a euro-era high above 7.5 percent. Even Europe's strongest economies may not be immune to the fallout from the region's debt crisis as Moody's Investors Service on Monday changed its outlook for Germany, the Netherlands and Luxembourg to negative from stable. In Italy, the euro zone's third-largest economy that is seen as the next weakest link after Spain, media reported that ten cities faced problems managing their finances, underlying growing concern about the sustainability of the country's local finances and echoing events in Spain. Investors will likely trawl through factory activity and other data out of the euro zone due later in the session for more hints on how the single-currency region is faring. Although an upcoming speech by U.S. Federal Reserve Chairman Ben Bernanke is not expected to yield further stimulus measures, it may shed more light on the state of the world's largest economy along with a slew of factory activity and retail numbers. "The next important data to scour for trading cues are the various PMI data out of Europe and U.S. retail numbers tonight. Should they turn out worse than expected, today's rally could easily fade," a Shanghai-based trader said. Base metals prices at 0346 GMT Metal Last Change Pct Move YTD pct chg LME Cu 7471.00 70.00 +0.95 -1.70 SHFE CU FUT NOV2 54610 240 +0.44 -1.83 LME Alum 1882.00 4.00 +0.21 -6.83 SHFE AL FUT OCT2 15400 45 +0.29 -2.78 HG COPPER SEP2 338.95 0.95 +0.28 -1.35 LME Zinc 1827.00 13.00 +0.72 -0.98 SHFE ZN FUT NOV2 14555 90 +0.62 -1.62 LME Nickel 15668.00 68.00 +0.44 -16.26 LME Lead 1871.00 11.00 +0.59 -8.06 SHFE PB FUT 14860 55 +0.37 -2.81 LME Tin 18400.00 50.00 +0.27 -4.17 LME/Shanghai arb 1222 Shanghai and COMEX contracts show most active months ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month ($1 = 6.3864 Chinese yuan) (Editing by Ed Davies and Chris Lewis)
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