Trade alert: Trading the Chinese betas and leads/lags
Europe is still the region that suffers the most in relative terms when Chinese imports decline. The weakness in EUR PMIs yesterday is a first warning of a trend that may accelerate in coming months due to lagged effects of Chinese weakness.
Chart 1: When China sniffs, Europe catches a cold
Will Europe be the next shoe to drop in the Chinese RE soap opera? Here is how we position for lagged spill-overs to Europe.