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Copper futures erase gains following weak euro zone PMI data

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Investing.com - Copper futures erased earlier gains to trade little changed during European morning hours on Thursday, as appetite for riskier assets weakened following the release of disappointing German and French manufacturing data.

Concerns over the handling of the financial situation in Cyprus also weighed.

On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.445 a pound during European morning trade, nearly flat on the day.

New York-traded copper prices rose by as much as 1.3% earlier in the day to hit a session high of USD3.492 a pound.

Copper prices came under pressure after market research group Markit said that its preliminary euro zone manufacturing purchasing managers' index fell to a seasonally adjusted 46.6 in March from a final reading of 47.9 in February.

Analysts had expected the index to ease up to 48.2 in March.

Germany's manufacturing purchasing managers' index fell to a seasonally adjusted 48.9 in March from a final reading of 50.3 in February, indicating contraction. Analysts had expected the index to tick up to 50.5.

The report also showed that service sector activity in Germany expanded at the slowest rate in four months in March, with the services PMI falling to 51.6 from 54.7 in February.

The data came after a report showing that the French manufacturing PMI came in at 43.9 in March, unchanged from February's reading.

Service sector activity in France fell to a 49-month low of 41.9 in March from a final reading of 43.7 in February.

Meanwhile, in Cyprus, negotiations aimed at finding an alternative solution on a bailout deal for the tiny island continued after the country's parliament rejected a controversial bank deposit tax in a vote on Tuesday.

Cyprus needs to come up with EUR5.8 billion on its own in order to secure EUR10 billion in rescue loans from international creditors.

Copper prices were supported earlier in the day following the release of upbeat Chinese manufacturing data.

China's HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, rose to 51.7 in March from a final reading of 50.4 in February.

China is the world's largest copper consumer, accounting for almost 40% of world consumption last year.

Sentiment was also supported after the Federal Reserve reaffirmed its commitment to leave interest rates unchanged near zero and continue buying USD85 billion in debt each month, citing concerns over high unemployment levels and risks from tax increases and federal government spending cuts.

Elsewhere on the Comex, gold for April delivery was flat to trade at USD1,607.90 a troy ounce, while silver for May delivery added 0.2% to trade at USD28.88 a troy ounce.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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