Investor sentiment surrounding China is usually driven by the country's domestic growth projections. Financial markets reacted to the release on Tuesday by selling copper and bidding the yen higher. Copper is an industrial metal that is closely tied to Chinese business investment. For this reason many investors use copper's price as a reliable measure of economic health.
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The metal sold off rapidly following the release, but it soon stabilized. The long term trend is upward, but uncertainty surrounding future policy in both the United States and China could lead to copper prices consolidating for a few months.
Similarly, the yen was bid higher on the industrial data release. The Japanese currency generally strengthens during times of market weakness as investors prefer its safe-haven status. Weakness in the Chinese data prompted a selloff in global equities, and hinted at weaker future growth out of the region.
The dollar/yen currency cross looks to have formed a double top pattern on the daily chart, predicting future strength in in the yen. The culmination of both a weaker China and appreciating yen could be a negative catalyst for global equity markets going forward.