The NPC began yesterday and the announcements that the 2013 inflation target is 3.5% and the M2 target is 13%, would seem to make any possibility of loosened monetary policy very remote indeed. In fact Nomura suggests that we may even see some policy tightening post-NPC.
Tighter monetary policy in China would mean less investment money to be spent and this is generally seen as AUD negative. The iron ore price ignored the positive lead from other commodities and fell by almost 2.5%.