What Do Chinese Macro Announcements Tell Us About the World Economy?
47 Pages Posted: 15 Oct 2013 Last revised: 17 Jul 2015
Date Written: June 1, 2015
We examine the effect of scheduled macroeconomic announcements made by China on world financial and commodity futures markets. All announcements related to Chinese manufacturing and industrial output move stock markets, energy and industrial commodities as well as commodity currencies. News about Chinese domestic consumption leaves most markets unaffected, suggesting that market participants view the announcements primarily as a signal of the state of the global economy rather than merely of China’s domestic economy. The market response to unexpectedly strong output announcements is not consistent with investors being concerned about tightening of Chinese macroeconomic policy; instead, the world markets view strong Chinese output as a rising tide that lifts all boats.
Keywords: Macroeconomic news, China, Economic integration, Financial markets, Commodity prices
JEL Classification: E44; G14; G15
Suggested Citation: Suggested Citation