No Change Expected In Today’s LPR Fixings

A quick reminder that the latest round of monthly PBoC LPR fixings will be announced at 01:30 London/09:30 Beijing, with almost unanimous expectations for no change in both the 1- & 5-Year fixings. The respective interest rates stand at 3.70% and 4.60% after last months cuts. A quick reminder that the 1-Year benchmark was cut by 10bp in January, while the 5-Year benchmark fixed 5bp lower. The rate applied to February’s mid-month 1-Year MLF operations was left unchanged (in line with consensus, although that survey was more evenly split, with plenty of speculation evident re: the prospect for a cut in the interest rate applied to MLF), which limits the scope for a move in today’s fixings. Note that the February MLF operations saw a net CNY100bn liquidity injection. The lack of movement in the MLF rate pointed to a wait and see stance when it comes to judging the impact of January’s monetary easing. Subsequent commentary pieces run in the Chinese state-owned media sphere have pointed to such a dynamic, with various analysts flagging the likelihood of further monetary easing in the period ahead, as opposed to imminently.