💎 Bargain Hunter: Undervalued stocks with massive upside potentialGet the list

China's GDP Announcement: How Will Markets React?

Published 01/19/2015, 01:26 AM

With interest in the quarterly China GDP announcement at 2:00 GMT tomorrow, we had a look back over the last four years (calendar 2011-2014) to see how markets moved between close of trade the day before release, and release date.

Exchange rate volatility showed a significant increase over the normal level on announcement date for GBP/USD (+40%), AUD/USD, EUR/USD and USD/CAD (each +20%). USD/JPY and the US dollar index showed relatively little change.

Impact of China GDP release on exchange rate volatility:2011-2014

Comparisons for major stock indices follow. Not much impact on the Euro/UK area but watch the S&P 500 and Asia Pacific especially China/Hong Kong-

Impact of China GDP release on Index Volatility: 2011-2014

For commodities, we found substantial increases for silver, gold and the DJ UBS Commodity Index:

Impact of China GDP release on commodity price volatility 2011-2014

We then looked at the impact of surprises – the price changes applying to an announcement that exceeded consensus vs one that surprised on the downside.

Over the 16 quarters analyzed, eight came in above consensus, three came in below and five came in on consensus.

The outcomes for currencies were as follows. Undershooting consensus was generally favorable for the USD (except for USD/JPY) and a result in line with consensus tended to be unfavorable to the USD. Overshoots seemed to have relatively little impact.

China GDP surprise on exchange rate movement 2011-2014

For stock indices, we found:

China GDP surprise on Indexes 2011-2014

Directionally the results are as would be expected with results coming in line with or above consensus driving up markets and undershoots pushing markets down. If anything, market outcomes were most favorable when results achieved consensus. Note the tendency for the indices to react more to downside surprises than results in line with or better than consensus.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.

Commodities reacted far more unfavorably to downside surprises than to in line or overshoot results. As would be expected, major reactions were in the opposite direction to the USD.

China GDP surprise on commoditty price movement 20011-2014

Which stock should you buy in your very next trade?

AI computing powers are changing the stock market. Investing.com's ProPicks AI includes 6 winning stock portfolios chosen by our advanced AI. In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. Which stock will be the next to soar?

Unlock ProPicks AI
Read Next

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.