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Global Financial Spillovers of Chinese Macroeconomic Surprises

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  • Camila Gutierrez
  • Javier Turen
  • Alejandro Vicondoa

Abstract

We study how Chinese macroeconomic surprises affect global financial markets. Exploiting forecast errors around key data releases and a 60-minute window around the release, we show that positive industrial production (IP) surprises lead to immediate increases in Chinese and Asia-Pacific stock returns, global long-term yields, and commodity prices highly demanded by China. A complementary identification strategy, which builds on different time zones, confirms positive spillovers to international equity markets, with stronger effects in countries more exposed to Chinese trade. Our results highlight the role of both Hedging Premia and Growth Expectations in driving asset price comovement. The findings highlight China’s growing influence in global markets and position it as a driver of the Global Financial Cycle.

Suggested Citation

  • Camila Gutierrez & Javier Turen & Alejandro Vicondoa, 2025. "Global Financial Spillovers of Chinese Macroeconomic Surprises," IMF Working Papers 2025/133, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2025/133
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    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F30 - International Economics - - International Finance - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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