AUD/USD flows: The PBoC cut 5yr LPR by 25bp

The People’s Bank of China cut its 5-year Loan Prime Rate by 25bp to 3.95% from 4.20%. It was one of the largest cut even seen but its impact for the market seems to be muted as we are seeing regional equity indexes remaining in the red with individual ones up a few pips. The market seems to think the cut is coming too late and has been speculating from more, stronger stimulus from the Chinese government. The RBA minutes does not give us anything new for they continue to keep doors open as long as inflation and domestic demand remain strong. That is the caveat of changes in the wordings of February's forward guidance which can be interpreted as no more hike unless CPI spikes. 

The AUD/USD did not cheer the PBoC rate cut for Yuan is also giving the cold shoulder. AUD/USD is down 0.14% to 0.6531.