Softer Risk Appetite Evident Despite Larger Than Expected 5yr LPR Cut In China

Risk appetite has been weaker in recent dealings. The surprise 25bps 5yr LPR cut hasn't done much to aid broader risk trends.

• China onshore equities are from earlier lows, but struggling for positive territory. Property related names are outperforming with the 5yr LPR cut likely to see mortgage rates cut and aid the housing/consumer sector, although overall gains are modest at this stage.
• USD/CNH is lower, albeit modestly, the pair last under 7.2100. USD sentiment elsewhere is positive though, the BBDXY up 0.10%, while NZD (down 0.3%) and AUD (off 0.20%) underperforming at the margins.
• US equity futures have weakened, the benchmark Eminis and Nasdaq futures down 0.30% at this stage. There doesn't appear to be a direct catalyst for the move. Higher US yields may be weighing at the margin, with US cash fixed income markets re-opening this morning. However, after rising 2-3bps at the open, there hasn't been any follow through.
• Equity trends through the rest of the Asia Pac region are mostly softer, which is likely aiding the USD bid.