Copper bounces from 3-week low but macro headwinds dominate

LONDON: Copper climbed more than 1 percent on Friday as the dollar looked set to record its biggest weekly drop in two months, prompting bargain hunting in a metal that recorded its steepest slide in five weeks during the previous session.

Three-month copper on the London Metal Exchange

traded up 1.5 percent at $6,163 a tonne in official midday rings. The contract had dropped 1.7 percent on Thursday after the arrest in Canada of a top executive at Chinese telecoms giant Huawei dampened hopes for a resolution of the US-China trade conflict.

The arrest came on the heels of a 90-day trade truce between the United States and China.

Helping copper overnight, the Wall Street Journal reported that US Federal Reserve officials are considering whether to signal a wait-and-see attitude after a likely rate increase at their meeting in December.

The news weighed on the dollar, making dollar-priced metals cheaper for non-US investors.

"Metals at the moment (are) all macro driven. The world is in a very vulnerable situation but (while) global growth looks like it's peaked (it's) not slowing measurably, so we're range trading. Copper still has very low exchange inventories," said Alastair Munro, metals analyst at Marex Spectron.

* US JOBS: Markets face a test from US payrolls data later in the session amid speculation that the US economy is heading for a tough patch, though the Fed emphasised the strength of the labour market in remarks late Thursday.

* CHINA OUTLOOK: While demand from top copper consumer China is weaker this month, CRU analyst Chris Wu said sentiment for next year remains positive amid expectations of stimulus measures on infrastructure from the government.

* JAPAN COPPER: Pan Pacific Copper, Japan's top copper smelter, expects the price of the industrial metal to rise toward $7,000 a tonne in 2019, from about $6,168 now, backed by firm global demand and tighter supply.