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Labourers work on scaffolding at a residential construction site in Hefei, Anhui province, China, on March 6, 2012.
Labourers work on scaffolding at a residential construction site in Hefei, Anhui province, China, on March 6, 2012.
(JIANAN YU/REUTERS/JIANAN YU/REUTERS)

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Canadian miners win when China’s money supply loosens

Buried within the release of China’s leading economic indicators is possibly the best forward-looking signal for Canadian mining stocks.

China’s Leading Economic Indicator Index, released Wednesday, is composed of five major components including the Hang Seng Mainland equity benchmark, industrial sales, fixed asset (infrastructure) investment, foreign direct investment and money supply growth. It is the last of those – money supply growth – that has shown a remarkable ability to predict the future course of Canadian mining stock performance.