* GRAPHIC-2019 asset returns:
* Cash zinc at premium over three-month contract
* Focus on U.S. Federal Reserve meeting (Adds closing prices, comment)By Pratima DesaiLONDON, July 29 (Reuters) - Copper prices rose on Mondaybefore planned U.S.-China trade talks and a flood of economicdata, while shrinking profits at Chinese industrial firmshighlighted the headwinds facing demand in the top consumingcountry.Benchmark copper on the London Metal Exchange (LME)ended up 0.9% in official rings to $6,018 a tonne.
"This will be an eventful week for base metals as investorsawait signals from key economic data releases and trade talksrestart between China and the U.S.," ING analyst Wenyu Yao said."Metals markets will be more influenced by the macro side."
GROWTH: Data due this week includes surveys of purchasingmanagers in China's manufacturing sector, the U.S. monthly jobsreport and ISM manufacturing survey, industrial output fromJapan and growth figures from the euro zone.FED: A major focus for markets this week is a meeting of theFederal Reserve on Tuesday and Wednesday. The U.S. central bankis widely expected to cut interest rates for the first time inmore than a decade.Lower rates will weigh on the U.S. currency, which when itfalls makes dollar-denominated commodities cheaper for importersusing other currencies, potentially boosting demand. INDUSTRY: Profits earned by China's industrial firmscontracted in June after a brief gain in May. TRADE: U.S. and Chinese negotiators meet in Shanghai thisweek for their first talks since a G20 truce last month, achange of scenery for two sides struggling to resolve deepdifferences on how to end a year-long trade war. "We doubt anything will come out of these talks, but if thetwo sides keep the dialogue going, that would be a positive inour view," said INTL FCStone analyst Edward Meir in a note.
CHINA: Analysts say changes in China's capital financingrules could boost infrastructure spending by 10% in the secondhalf of this year from the same period last year."Of the three sectors with preferential capital treatment,utilities - power grid - stand out as the only sector withcontracting investment year-to-date," analysts at JPMorgan saidin a note."If the additional infrastructure investment were to bespent on China's utilities sector, this could result in 500,000tonnes of additional copper demand."ZINC: Historically low stocks in LME-registered warehouses and one company holding large amounts of warrantsand contracts with nearby expiry dates have fuelledconcern about supplies on the LME market.This can be seen in the premium for cash zinc over thethree-month contract at $12 a tonne compared with adiscount a week ago.Benchmark zinc was up 1.3% at $2,469 per tonne,helped by data showing China's June imports of refined zincjumped 57% from the same time last year to 56,878 tonnes. PRICES: Aluminium gained 0.5% to $1,811 a tonne,lead slipped 0.9% to $2,047, tin fell 0.3% to$17,600 and nickel added 1.8% to $14,360.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^LME three-month zinc spread switches to premium ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Pratima Desai; additional reporting by MaiNguyen; Editing by Dale Hudson and Jan Harvey)