March 4, 2020 / 3:58 AM / a month ago

METALS-London copper rises as Fed cuts rates to counter coronavirus economic impact

March 4 (Reuters) - London copper prices advanced on Wednesday, supported by the U.S. Federal Reserve’s move to cut interest rates by half a percentage point to shield the world’s largest economy from the impact of the global coronavirus epidemic prices.

Three-month copper on the London Metal Exchange (LME) rose 1% to $$5,723.50 a tonne by 0314 GMT, while LME aluminium rose 0.1% to $1,723.50 a tonne and nickel advanced 1.6% to $12,755 a tonne.

Alongside the Fed’s move, a weaker U.S. dollar also lent support to LME metals by making the green-backed contracts cheaper for buyers using other currencies.

FUNDAMENTALS

* CHINA SERVICES: The impact of the outbreak in China is still being felt in the world’s no. 2 economy, with China’s services sector having its worst month on record in February as new orders plummeted to their lowest level since the global financial crisis.

* VIRUS: The World Health Organization warned of a global shortage and price gouging for protective equipment to fight the fast-spreading coronavirus as the virus spread to some 80 nations and infected around 91,000 people.

* ECB: The European Central Bank is preparing possible measures to provide liquidity to businesses hit by the economic fallout of the outbreak, sources told Reuters.

* PRICES: LME zinc increased 1.4% to $2,004 a tonne while the most-traded copper contract on the Shanghai Futures Exchange (ShFE) fell 0.7% to 45,120 yuan ($6,510.26) a tonne and ShFE aluminium fell 1% to 13,100 yuan a tonne and ShFE zinc dropped 1.6% to 15,850 yuan a tonne.

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MARKETS NEWS

* Asian shares wobbled and bonds held gains, as an emergency rate cut from the U.S. Federal Reserve did little to soothe investor fears over the coronavirus’s widening fallout.

DATA/EVENTS (GMT)

0500 India IHS Markit Svcs PMI Feb

0850 France Markit Svcs, Comp PMIs Feb

0855 Germany Markit Svcs PMI Feb

0855 Germany Markit Comp Final PMI Feb

0900 EU Markit Svcs, Comp Final PMIs Feb

0930 UK Reserve Assets Total Feb

1445 US Markit Comp, Svcs Final PMIs Feb

1500 US ISM N-Mfg PMI Feb

1900 US Federal Reserve issues Beige Book of

economic condition

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 6.9306 Chinese yuan renminbi) (Reporting by Mai Nguyen; Editing by Kenneth Maxwell)

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