PBOC money market activity today was huge

  • Injects 290 bn yuan through 28 day reverse repos
  • Injects 110 bn yuan through 7-day reverse repos

The biggest cash injection in 3 years through open market operations

Bloomberg follows up (bolding mine):

"The market is a bit nervous and liquidity is also needed to cover the Chinese New Year," said Frances Cheung, Hong Kong-based head of rates strategy for Asia ex-Japan at Societe Generale SA. "The fact that they are going for longer tenors on reverse repos and its MLF does add to market expectations for a delay in a reserve-ratio cut, which in itself could be linked to the currency market performance."

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The PBOC was warning of a delay/no cut in RRR yesterday: PBOC economist says other measures may make an RRR cut unnecessary

I reckon we will see a cut ... but maybe that's me being stubborn.