Inflation is expected to make another move in the wrong direction, as far as the Reserve Bank is concerned, with an interest rate hike still on the cards.
The Australian Bureau of Statistics is on Wednesday expected to reveal the consumer price index edged up in May on an annual basis.
The central bank's board opted to keep the cash rate unchanged at 4.35 per cent on Tuesday, but left open the possibility of a hike given persistent inflation and upward revisions to household consumption.
Governor Michele Bullock said June quarter inflation data, set to be released at the end of July, would be critical ahead of the board's next meeting in August.
But an upward surprise in Wednesday's minor readout would still spook investors.
May inflation data is expected to be 0.3 per cent lower on a monthly basis, but unfavourable base effects mean the annual growth rate will lift from 3.6 per cent to 3.7 per cent, says CommSec senior economist Ryan Felsman.
"Timely indicators continue to point towards a gradual easing in price and wage pressures," he said.
RBA deputy governor Andrew Hauser will give a further indication of the board's thought processes when he delivers a speech at the A50 Australian Economic Forum on Thursday.
Bolstering the argument against raising rates are signs the economy is starting to sputter, growing at just 0.1 per cent in the March quarter, while unemployment is on the rise and wages are growing slower than expected.
Westpac's leading index will on Wednesday provide a glimpse of how economic growth is expected to shape up three to nine months into the future.
Other financial reports out this week include data on job vacancies and household wealth, both to be released on Thursday.
Regardless of what the actual CPI figure will be, it remains stubbornly above the RBA's target range of 2-3 per cent.
Australia continues to be somewhat of an outlier among developed economies in this regard.
The US Federal Reserve's preferred inflation metric out on Friday - personal consumption expenditures - is expected to show price growth of 2.6 per cent for the year to May in the world's largest economy.
That would mean a 0.2 per cent drop from the previous month and boost hopes of a September interest rate cut, Mr Felsman said.
US stocks edged slightly lower on Friday as the tech sector fell. The Dow Jones Industrial Average rose 15.57 points, or 0.04 per cent, to 39,150.33, while the S&P500 eased 8.55 points, or 0.16 per cent, to finish at 5464.62.
The tech-heavy Nasdaq Composite shed 32.23 points, or 0.18 per cent, to 17,689.36.
Australian shares finished higher on Friday with the S&P/ASX200 index gaining 26.6 points, or 0.34 per cent, to 7,796. The broader All Ordinaries climbed 28.4 points, or 0.35 per cent, to reach 8.040.5 at the close.
For the week, the ASX200 rose 0.82 per cent after losing 1.7 per cent the previous week.
