(Bloomberg) -- Copper declined to the lowest since March as US bond yields rallied, with the focus shifting to the Federal Reserve’s monetary policy and China breaking for a national holiday.

The metal fell alongside aluminum and zinc. The selloff in global bonds has gathered momentum with the reprieve in the US government shutdown prompting traders to raise bets on a November interest rate hike. Climbing Treasury yields hurt non-yielding assets such as commodities. 

Copper still remains trapped in a fairly tight range as investors wait for a decisive shift in economic data from top-consumer China. An official gauge of manufacturing activity just barely returned to growth for the first time in six months in September, a sign of the muted impact of stimulus measures so far.

Weak physical demand for copper is evident in the discount applied to metal for immediate delivery on the London Metal Exchange. The spread between cash copper contracts and three-month futures is now the widest since 2000, though that’s in part driven by higher interest rates boosting financing costs for traders.

China is on an eight-day Golden Week holiday, which historically is a key test for the property market, a globally significant sector for metals demand that has been in turmoil for two years. Developers are now looking to see if the holiday sparks the revival they’re looking for.

In the US, data on Monday showed a measure of factory activity contracted in September by the least in nearly a year, another sign the US economy remains robust in the face of higher interest rates. 

Copper futures fell 2% to $8,270.50 a metric ton on the London Metal Exchange after earlier dropping to $8,048.50.

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