Yep, I'm also somewhat perplexed - interest rate down, stocks down, currency up. Not the standard reaction!
While this is curious, its not going to change my strategy - the saving on interest will just get tipped into the stash (debt paydown).
What I don't understand is how wide the yield differential is between stocks and home loans at the moment. I'm borrowing money at 4.04% after this cut. The yield on the broad Australian stock market is currently about 4.4%. Add in the franking credits, and its just over 6%. So, borrowing money to invest in stocks nets 2% positive income. I can't see how that is sustainable - either prices will be bid up to close that gap, or Mr Market is expecting a) dividends to fall, b) interest rates to rise, or c) pricing in a high likelihood of capital loss.
I'm fully intending on sticking with the DRP/BSPs, and knocking down my debt load with my savings.