LPR cuts could bolster commodity futures

On Aug 22, China’s Central Bank cut 1-year LPR by 5 basis points to 3.65% and lowered 5-year or longer tenure LPR by 15 basis points to 4.3%. Earlier on Aug 15, the MLF was reduced by 10 basis points, releasing signals for LPR cuts. And then, LPR was lowered as expected, in a response to weak economic data China recorded in Jul. The cuts is anticipated to lend support to commodity futures. However, there’s still uncertainty whether the cuts could drive up real estate market and social demand.