NEW YORK ( TheStreet) -- Last Friday markets cheered as U.S. employment data hinted at continued Fed easing. Over the weekend, however, the release of important Chinese data shook East Asian markets.Releases ranging from inflation to export data showed that the global economy is still not strong enough to thrive without central bank easing. As economies gradually recover, China will follow in stride, but until then, talk of tightening monetary policy in any region of the world will incite volatility. The first chart below is of FTSE China 25 Index Fund ( FXI) over Total World Stock Index ETF ( VT). The pair measures the relative strength of Chinese equities versus a broader global market. The pair has been trending downward for the past couple years, and with the underperformance of this past weekend's data, it broke sharply lower.
The relative weakness of Chinese equities is due to the continued weakness of the global economy. Europe and the U.S. are key trading partners with China, and their declines have kept investors wary of Chinese growth. Until the U.S. and Euopean economies pick up, the pair will continue its trend lower.
A pickup in output for Chinese industrials will lead to an increased demand for copper, and this chart, along with the other charts tied to Chinese growth, will begin to trend higher.