Markets easily shook off soft Chinese data released last weekend but a leading indicator of global economic strength continues to flash warning signs. Of course, I’m speaking about copper.
Note how closely the recent fall in copper matches the recent decline in the Canadian dollar (USD/CAD is inverted on this chart):
One important caveat is that CAD and copper both may appear weaker because of the broad US dollar strength. Copper prices in yen, for instance, is up 5% since November.
At some point, however, copper prices will need to rebound to confirm a pickup in the global economy.