Optimism that China can overcome a hard landing put a bid in risk assets and hit the dollar Thursday morning.
A very specific rumor circulated that China’s first quarter GDP will come in at 9 percent, rather than the expected 8.4 percent, when released overnight.
Whether the rumor is true or not did not matter to traders. The dollar sunk, the euro rose, and commodities-based currencies edged higher. Stocks jumped , copper rose , and oil moved higher.
“I tend to be suspicious of Chinese economic data rumors,” said Marc Chandler, head of foreign-exchange strategy. He said the reason it has impact is because people believe China was close to further easing policy.
China’s Shanghai indexrose 1.8 percent Thursday. Bank lending in China was reported overnight to have surged to the highest amount since January 2011. There was also stronger-than-expected growth in money supply, which rose 13.4 percent in March from a year ago.
Miller Tabak market strategist Peter Boockvar said it’s possible the GDP rumor could have started with a wire service story, quoting a Chinese government researcher. He said the researcher said he thought GDP could be 9 percent for the full year, but 8.4 to 8.5 percent for the quarter.Page 1 of 3 | Next Page