PBOC removes floor on lending rates while keeping a cap on interest on deposits, Market flows and technicals

Commentary
 
2 topics today.
 
PBOC removes floor on lending rates while keeping a cap on interest on deposits for banks in China.
This is good. Simply explained, the cost to the money banks lend out is capped. Removal of the floor to lending rates is to encourage banks to lend at lower rates to encourage borrowing buy businesses. However, by doing this, banks will end up squeezing their own margins. This is just a sentiment move that banks now have the option to improve liquidity at their own expense.
Implications of this is, if the banks really reduce lending rates, capital intensive industries like property and ship-building will benefit.
 
Market Flow and Technicals
It seems that the great rotation to stocks may not happen so soon as sideline money shifts back into bonds. Cross asset class, we see money shifting back into US Treasuries consistent with inflow on USD. This rides on the back of sentiment where bond buying by the Fed will extent to mid-2014 at the least and up to 2016 as speculated by PIMCO.
Flow-wise, asset allocation is selective. Japan and Korea are the obvious leaders on inflow, together with Mexico. South-east Asia sees most outflow from Malaysia. Singapore market is relatively muted, with flattish inflow.
Weekly charts on indices have been relatively confusing. The candles have swung wildly from bearish to bullish in the last 3 weeks. Daily charts show short-term uptrend to continue in various markets.