In this Asian Focus Video, Yvette Roper of TradingFloor.com interviews Andrew Robinson, Correspondent for Saxo Capital Markets in Singapore about the likely reasoning behind the Reserve Bank of Australia’s deeper rate cut and the impact on consumer borrowing. They also discuss New Zealand’s higher than expected first quarter employment data and controversial PMI indices out of China. Andrew also previews interesting data for the Asian region to be released next week, including Certificate of Entitlement premiums from Singapore which are set to continue be a key contributor to rising inflation during the next month.

This week the Reserve Bank of Australia cut the cash target rate by a more than expected 50 basis points. More benign Inflation and a weaker economy is expected to be confirmed as the reasoning behind the cut in the RBA’s monetary policy statement due Friday. The full impact in terms of reduced borrowing costs has been barely passed on to consumers though which is why the odds are already quite high (around 70%) for another 25 basis point cut at the bank’s June 5 meeting.

New Zealand reported its highest unemployment rate since 2010 for the first quarter which put the kiwi under pressure and further delayed expectations of any interest rate normalisation soon.

China’s manufacturing PMI reports (both the official data and the HSBC equivalent for April) showed slight improvements though there is still a great discrepancy between the two, with the private sector figure continuing to indicate contraction and the government figure expansion. Due to the different components and weightings it’s difficult to compare them like for like, says Andrew. Instead, they need to be analysed individually to get an indication of Chinese manufacturing activity.

Looking ahead to upcoming Asian data, an employment report in Australia plus China trade numbers, industrial production and CPI will be in focus next week. Of particular interest will be Wednesday’s Singapore data on certificate of entitlements, which are required for putting a new car on the road. A recent increase in premiums due to expected restrictions is seen having a dramatic effect on inflation.

See more of Andrew's Asian market commentary on TradingFloor.com