Traders are preparing for the official Chinese manufacturing purchasing managers index report which is due out 2am (London time). The consensus is for a reading of 50.5, compared with the March reading of 50.3.
The survey of Chinese manufacturing that is carried out by HSBC is separate, but is often a useful indicator. The latest HSBC report was 48.3, which was in line with expectations but showed the sector was in contraction territory.
The two reports do not always paint the same picture, but it is unusual that the HSBC survey indicates the sector is in contraction territory, while the official report from Beijing states the sector is slowly expanding.
Copper is well below the 200-day moving average of 321 cents per pound. If the report disappoints, we could move towards the 300 cents per pound mark which has provided support in April. On the upside, we could retest the recent high of 310 cents per pound mark.