LONDON/SYDNEY (Reuters) – World shares climbed on Thursday after Chinese exports proved far stronger than even bulls had imagined, while bond investors were still daunted by the staggering amount of U.S. debt set to be sold and a tussle over ECB bond buying.

Beijing reported exports rose 3.5% in April on a year earlier, completely confounding expectations of a 15.1% fall and outweighing a 14.2% drop in imports.

The surprise stoked speculation the Asian giant could recover from its coronavirus lockdown quicker than first thought and support global growth in the process.

The news had helped Japan’s Nikkei .N225 and Seoul’s Kopsi .KS11 recover from shaky starts and Europe’s main London .FTSE, Paris .FCHI and Frankfurt .GDAXI bourses all made 0.4%-0.7% early gains.

E-Mini futures for the S&P 500 ESc1 fared better with a bounce of 1.2%, though there were ominous signs too. Turkey’s lira fell to a record low amid worries about its dwindling reserves, oil was back under $30 a barrel and Italy’s bond yields hit 2% again.

“It’s clear that this virus has gone from east to west and we are now seeing that in the data,” said Societe Generale’s Kit Juckes pointing to the China numbers and relatively better purchasing managing data in countries such as Australia.

But with the full economic impact of COVID-19 still to be known and huge amounts of debt potentially pushing up borrowing costs “the market is hugely split between die hard bears and buy-on-dip buyers”, he added.

Markets had traded cautiously overnight with renewed Sino-U.S. tensions lurking in the background.

U.S. President Donald Trump said he would be able to report in about a week or two whether China is meeting its obligations under a trade deal, as Washington weighed punitive action against Beijing over its handling of the coronavirus outbreak.

The flow of economic data also remained grim, with U.S. private employers laying off 20 million workers in April and a Bank of England warning that the coronavirus crisis could cause the country’s biggest economic slump in 300 years.

Figures due later on Thursday are forecast to show initial U.S. jobless claims rose a further 3 million last week, while Friday’s payrolls report is expected to see 22 million jobs lost and unemployment hit 16% or higher.

“Despite their dizzying rally, we continue to be cautious on equities in the near term,” Luca Paolini, chief strategist at asset manager Pictet said. “Markets seem to be overestimating the speed of economic recovery.”

WORLD’S BIGGEST BORROWER

Bond markets saw one of the largest shifts in a while after the U.S. Treasury said it would borrow an astonishing $2.999 trillion during the June quarter, five times larger than the previous single-quarter record.

It will sell $96 billion next week alone and a surprising amount of that will be at longer tenors, which in turn pushed up long-term yields and steepened the curve.

Yields on 30-year bonds US30YT=RR jumped 7 basis points to 1.40%, the largest daily increase since mid-March, while rise in Italy’s yields to over 2% reflected worries caused by a German court ruling this week targeting the European Central Bank’s bond purchase programme.

France and Spain were also due to sell up to a combined 18.75 billion euros ($20.3 billion) of bonds following Germany’s first syndicated bond since 2015, which raised 7.5 billion euros on Wednesday alongside a 3.2 billion auction.

The rise in U.S. yields gave a lift to the U.S. dollar on most currencies and its index firmed to 100.192 =USD. The euro drooped below $1.08 EUR=, hurt too by a gloomy economic outlook from the European Commission.

Indeed, the single currency sank to its lowest against the Japanese yen since late 2016 at 114.40 EURJPY=, and even the dollar touched a seven-week trough at 105.98 yen JPY=.

“There’s a lot to like about the yen these days,” said Deutsche Bank’s global head of G10 FX Alan Ruskin.

He noted that with rates across the globe falling to all time lows, the yen no longer had a large yield disadvantage.

“Across all of 3m, 2y, 5y and long-end tenors, the average spread between yen rates and the average of G10 yields are at lows not seen for at least the last three decades,” he said.

The yen was also cheap by many measures, he argued, with fair value put at around 85 per dollar.

In commodity markets, gold had eased on expectations that supplies will grow as bullion refineries resume operations. The metal was last up 0.3% at $1,691.54 an ounce XAU=.

Oil prices were slipping back though after a six-session streak of gains which saw Brent almost double since hitting a 21-year low in April.

Brent crude LCOc1 futures were last down 14 cents at $29.59 a barrel, while U.S. crude CLc1 eased 19 cents to $23.85.

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