Asian Bank Stocks Slide as BofA Warning and Rising Yields Hit Sentiment 
BOJ Set for 25-Basis-Point Rate Hike as Yen Weakness Fuels Inflation 
US Stock Futures Rise as Markets Brace for Fed Rate Hike 
Oil Prices Fall as Saudi Supply Improves, Middle East Fears Ease 
Iran Economic Crisis Forces Afghan Families to Return Home 
Trump Threatens EU Tariffs Over Canada Membership Proposal 
UK Wage Growth Slows as BoE Rate Decision Looms 
Trump Hopes Iran War Nears End as Yemen Fighting Escalates 
Asian Stocks Steady as AI Shares Rebound Ahead of Fed Decision 
Add as a preferred source on Google
Chances of USD/CNY firmly staying below the 7.00 mark still remains low, given the People’s Bank of China (PBoC) new fixing and monetary policy tactics, according to the latest research report from Commerzbank.
This morning, the PBoC surprisingly cut the rates for medium-term lending facility (MLF) by 5bps, the first cut since 2016.
As the MLF is now the base rate for the loan prime rate (LPR), the new loan benchmark rates, today's MLF rate cut looks like a "game changer" from a rates perspective.
However, given the 5bps cut is actually tiny, it might be fair to say the PBoC only fine-tuned its monetary policy stance. According to the report, today's tiny MLF cut seems be more interesting if taking a FX perspective.
Typically, a rate cut will bring depreciation pressure to the currency. That said, today's unexpected rate cut by the PBoC seems to hint that they believe the depreciation pressure on CNY, if there is any, is tolerable or even welcomed by the Chinese policy makers, Commerzbank further noted in the report.
