China historic rate cut, read from the bottom up for the chronology:

The People’s Bank of China cut its 5-year Loan Prime Rate by 25bp, the most ever, today. The 5-year was cut to 3.95% from 4.20%. The 1-year was left unchanged at 4.35%.

The 5-year is a benchmark for mortgage rates in China and a big part of the reasoning behind the PBoC cut was support for the deeply troubled property sector.

Chinese equity markets, both on the mainland and Hong Kong are mixed to down. As I post the Shanghai Composite is up something like 0.1% while the CSI 300 is negative by a similar tiny percentage. Hong Kong’s Hang Seng is a touch lower also.


From the Reserve Bank of Australia today we had February meeting minutes. Since the meeting we’ve had a press conference from Reserve Bank of Australia Governor Bullock, the latest Statement on Monetary Policy (SoMP), a shockingly awful employment report, and Reserve Bank of Australia Governor Bullock speaking twice in parliament. The minutes were thus dated and stale and did not add new information. There were pro forma comments in it such as the retention of optionality on policy with the Board saying its “appropriate not to rule out another rise in rates”.

There was little else in the news of much impact at all.

The US dollar gained a few points on the session. EUR/USD, AUD/USD, NZD/USD, GBP/USD while USD/CAD and USD/CHF rose. USD/JPY ticked above 150.35 and its not much lower as I post. We had the usual ineffective sort of comments intended to support the yen from Japan’s finance minister Suzuki. Perhaps the counterfactual is USD/JPY would have risen more without his jawboning, but we’ll never know.

USD/CNH is down a little on the session:

usdcnh chart pboc rate cut 20 February 2024 wrap 2