Bloomberg’s chart of the day shows the very high correlation between the Chinese property market and copper prices. Property prices have been a reliable leading indicator of economic activity in China and commodity prices. If the Chinese property market is telling us anything right now it’s that global economic activity could be due for a dip in the coming months:

The CHART OF THE DAY shows the Shanghai Property Index of Chinese developer stocks, which has led moves in copper prices since 2007, is falling. Concerns among investors that China will introduce policies including a property tax to curb home prices drove a 29 percent drop this year in the index of 34 real-estate companies traded in Shanghai. China makes up 27 percent of world copper demand, Goldman Sachs Group Inc. said in January.

“There could be further downward pressure on the copper price,” MF Global analyst Jeremy Cave wrote in a report. “Over 40 percent of copper is used in construction, so the relationship with Chinese property markets is clear.”