Minutes from the RBA board's last meeting confirmed the central bank was holding out for more signs inflation was on track before cutting again, highlighting the importance of Wednesday's quarterly consumer price index.
AMP chief economist Shane Oliver believes an annualised result of 2.8 per cent or below for the RBA's preferred trimmed mean measure would clear the way for another rate cut in its August 11-12 meeting.
But anything higher and we could be in for another hold.
Dr Oliver predicts the trimmed mean will come in at 2.6 per cent year-on-year, down from the 2.9 per cent figure in the March quarter and close to the midpoint of the RBA's 2-3 per cent target range.
"Expect solid increases in prices for clothing, health and travel with a modest rise in new dwelling costs offset by softness in transport and petrol prices, communication, education and insurance," he wrote in a research note.
"However, as the RBA has noted, some of the components in the recent monthly CPI suggest upside risk to the trimmed mean inflation."
The market consensus is for a rise of 2.7 per cent, which would be higher than the RBA's forecast of 2.6 per cent. Even higher than that and it could cause the market to rethink its near certain odds of an August rate cut.
"The money market sees a 98 per cent chance of an August rate cut, which is probably a bit too high," Dr Oliver said.
"We would put it at around 80 per cent."
On Thursday, economists will gorge on a feast of data as the ABS releases retail trade, building approvals and international trade price figures.
The retail print is the last the bureau will produce before it switches over to a more comprehensive measure of consumption, the monthly household spending indicator.
"Appropriately, monthly sales look set for one 'last hurrah' with the June update expected to see a robust one per cent gain - the best monthly result since Jan 2024," said economists from Westpac.
But the gain mainly reflects a bounce back from soft sales in previous months, they said, as consumers struggle to gain momentum following the loss of purchasing power during the post-pandemic inflation spike.
Property analytics firm Cotality will update its home value index on Friday, with prices expected to continue to be propelled upwards as falling interest rates boost buyer demand.
Investors on Wall Street are meanwhile optimistic the US will soon reach a trade deal with the European Union.
Indices notched record high closes on Friday ahead of European Commission President Ursula von der Leyen's meeting with Donald Trump in Scotland on Sunday.
The S&P 500 climbed 0.40 per cent to end the session at 6,388.64 points. The Nasdaq gained 0.24 per cent to 21,108.32 points and the Dow Jones Industrial Average rose 0.47 per cent to 44,901.92 points.
Australian share futures were down 5.0 points, or 0.05 per cent, to 8,360.
The benchmark S&P/ASX200 index on Friday dropped 42.5 points, or 0.49 per cent, to 8,666.9, while the broader All Ordinaries was down 45.1 points, or 0.5 per cent, to 8,934.3.
