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METALS-Copper treads water ahead of Fed outcome, Brexit uncertainty

Published 15/06/2016, 12:42 pm
© Reuters.  METALS-Copper treads water ahead of Fed outcome, Brexit uncertainty
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* Nickel in tight ranges as market eyes Colombia mine strike

* Coming up: Federal Reserve policy statement at 1800 GMT (Adds analyst comment, adds possible Colombia nickel mine strike)

By Manolo Serapio Jr

MANILA, June 15 (Reuters) - London copper futures steadied on Wednesday as investors exercised caution ahead of the outcome of the U.S. Federal Reserve's policy meeting and a looming British vote on exiting the European Union.

The Fed is unlikely to hike interest rates at the end of its two-day policy meeting on Wednesday following a recent batch of weak U.S. data, led by the nonfarm payrolls in May which grew the least since September 2010.

Any weakness in the U.S. dollar as the Fed keeps rates unchanged could support dollar-denominated commodities such as copper and oil as they become cheaper for holders of other currencies.

But analysts say the British referendum on June 23 on leaving the European Union may dominate market sentiment.

"Markets will be focused on the Fed's dot plot (summary of economic projections) and what Janet Yellen has to say about the timing of the next rate hike. However, this may become irrelevant if Britain does vote for Brexit and markets react negatively into July," said Ric Spooner, chief market analyst at CMC Markets in Sydney.

Germany's 10-year bund yield DE10YT=TWEB turned negative for the first time ever on Tuesday after a series of polls showed a big lead for the campaign for Britain to leave the EU. GVD/EUR

Three-month copper on the London Metal Exchange CMCU3 was up 0.5 percent at $4,544 a tonne by 0212 GMT. The industrial metal has fallen in three of the past four sessions, touching a four-month low of $4,483.50 on June 9.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 slipped 0.3 percent to 35,200 yuan ($5,335) a tonne.

Nickel was in tight ranges in both London and Shanghai with traders keeping an eye on a possible strike at Colombia's Cerro Matoso mine that could start on Tuesday. mine is owned by Australia's South32 Ltd S32.AX , spun off by BHP Billiton (LON:BLT) BHP.AX a year ago. The Cerro Matoso mine is one of the world's largest producers of ferronickel where a two-week strike last year forced BHP to declare force majeure.

Nickel gained 0.2 percent to $8,905 a tonne on LME CMNI3 and rose 1 percent to 71,050 yuan a tonne in Shanghai SNIcv1 .

PRICES

Three month LME copper

CMCU3

Most active ShFE copper

SCFcv1

Three month LME aluminium

CMAL3

Most active ShFE aluminium

SAFcv1

Three month LME zinc

CMZN3

Most active ShFE zinc

SZNcv1

Three month LME lead

CMPB3

Most active ShFE lead

SPBcv1

Three month LME nickel

CMNI3

Most active ShFE nickel

SNIcv1

Three month LME tin

CMSN3

Most active ShFE tin

SSNcv1

($1 = 6.5974 Chinese yuan)

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