METALS-Copper recaptures $5,000 as Fed tones down rate hike plan

London copper popped back above the $5,000 mark on Thursday after U.S. monetary officials flagged fewer rate hikes this year because of a fragile global economy, knocking the dollar and boosting the value of commodities.

FUNDAMENTALS

* Three-month copper on the London Metal Exchange traded at $5,000 a tonne by 0117 GMT, up 1.5 percent after closing a tad lower in the previous session. Prices are so far struggling to break through the 200 day moving average at $5,018 a tonne, a break of which could set of fresh fund buying.

* Shanghai Futures Exchange copper climbed 1.4 percent to 37,870 yuan ($5,809) a tonne. ShFE zinc, nickel and tin were also up around 1 percent.

LME lead, nickel and zinc all rallied between 1-1.5 percent.

* The Federal Reserve held interest rates steady on Wednesday and indicated that moderate U.S. economic growth and “strong job gains” would allow it to tighten policy this year, with fresh projections showing policymakers expected two quarter-point hikes by the year’s end, half the number seen in December.

* Underlying U.S. inflation increased more than expected in February as rents and medical costs maintained their upward trend, which could keep the Federal Reserve on course to gradually raise interest rates this year.

* U.S. oil prices jumped almost 6 percent on Wednesday, erasing losses of the past two days, after major producers firmed up plans to meet in Qatar to discuss an output freeze and U.S. crude stockpiles grew less than expected.

* China’s Premier Li Keqiang defended the government’s economic policies on Wednesday, vowing there would be no mass layoffs and no hard landing for the world’s second-largest economy even as the government presses ahead with painful reforms.

* Nickel’s freefall may have halted as output cuts move the chronically oversupplied market towards deficit, but prices are unlikely to recover sharply unless more loss-making mines close.

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MARKETS NEWS

* Asian shares gained early on Thursday and the dollar was on the defensive after suffering substantial losses following the U.S. Federal Reserve’s move to reduce the number of interest rate hikes planned for this year.

DATA AHEAD (GMT)

1000 Euro zone Eurostat trade Jan

1200 Bank of England interest rate decision

1230 U.S. Weekly jobless claims

1230 U.S. Philly Fed business index Mar

1400 U.S. Leading index Feb

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

Source: Reuters (Reporting by Melanie Burton; Editing by Richard Pullin)