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Is China About To Raise Rates?

After a surprising and somewhat curious move out of Beijing, chatter on the Street suggests China may be looking to raise rates.

And they could do it as soon as Monday.

The speculation first began after China’s National Bureau of Statistics sent out an e-mail saying it would release economic data on consumer prices and industrial output two days early – over the weekend -- and not Monday Sept. 13th, as previously scheduled.

“The statistics bureau has almost never reported data on weekends before,” said analyst Chen Jianbo, a Beijing-based fixed-income analyst at BOC International in a Bloomberg interview.

This very unusual turn of events triggered speculation that the data will show something that Beijing wants to keep under control -- probably that inflation is rearing its ugly head.

China has ”a number of reasons to be cautious about inflation," says David Reidel of Reidel Research on Fast Money. "We’ve seen it tick up in recent months. I think they’re well above their 3% target."

And some investors are taking the speculation a step further and saying Beijing will raise a benchmark interest rate before markets open on Monday in an attempt to stave off inflation.

However, the outlook is hardly unanimous.

An interest-rate increase is unlikely “because top policy makers are concerned about growth and more biased toward thinking the risk of high inflation is limited,” Goldman Sachs said in a Sept. 6 note.

Despite his belief that inflation may be a growing concern, David Reidel agrees with Goldman. “Don’t read too much into it,” he tells the desk.

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Trader disclosure: On Sept. 9th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merc; Terranova Owns (APA), (AXP), (ARUN), (AAPL), (BMO), (RSH), (FCX), (GS), (IBM), (JOYG), (MRVL), (ORCL), (C), (POT), (GLD), (XBI), (SU), (X), (UPL), (SPLS), (OXY), (QCOM)

For Joe Terranova
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Brian Kelly
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For Jamie Baker
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