The main event will be Tuesday's meeting of the RBA, at which board members will have to decide whether or not last week's shock deflation report for the first quarter warrants a cut to the cash rate, to 1.75 per cent.

The futures market has priced in a 52 per cent chance of a cut, up from 12 per cent before Wednesday's release of the consumer price index showing a 0.2 per cent quarterly contraction in headline inflation for the first three months of the year.

Core inflation also came in well below expectations, with the year-on-year rate of 1.55 per cent well outside the RBA's 2 per cent to 3 per cent target band.

This, according to some RBA watchers, will be enough to force the central bank's hand.

However, this remains a minority view, with 15 out of 27 economists surveyed by Bloomberg still seeing no change to the 2 per cent cash rate.

Of the big four domestic lenders, only National Australia Bank has switched its forecast from 'on-hold' to 'further easing' as a result of the shock CPI result.

"NAB's view is that [the] materially lower-than-expected first-quarter CPI offers the RBA the opportunity to add more support to the domestic economy, without risk to their inflation target, even with an economy that continues to reveal resilience in the face of the resources downturn," wrote senior economist David de Garis at the weekend.

Commonwealth Bank of Australia's chief economist Michael Blythe, however, has argued that a breakdown of the first-quarter CPI shows it not to be as alarming as first thought.

A 0.2 per cent drop in food prices, for example, reflected healthy competitive pressures, while a sharp 2.6 per cent fall in clothing is ascribed to post-Christmas discounting. A 2.5 per cent contraction in transport costs simply reflects lower oil prices, the impact of which will eventually disappear.

"There is a perception that deflation was everywhere in the first quarter," wrote Mr Blythe at the weekend.

"The reality is that the price change distribution was well within the range of recent years. None of this is to say that inflation is anything but low.

"But, again, the first-quarter CPI is not the harbinger of deflation that would concern the RBA."

Despite economists' split on Tuesday's rate call, there is virtual consensus that the RBA's longer-term view of inflation is likely to be tweaked when it releases its updated Statement on Monetary Policy on Friday.

Of as much interest, but not as much impact on markets, will be the Federal Treasurer's medium-term view of the Australian economy when he hands down this year's budget on Tuesday night.

Economists surveyed by Bloomberg expect the Turnbull government to unveil a deficit of around $35 billion, up slightly from the $33.7 billion shortfall contained in the mid-year economic and fiscal outlook late last year.

Any detail of stimulus in infrastructure, telecommunications, healthcare and other government-related sectors could lift some stocks, while debt issuance plans can also move bond markets.

By and large, however, market reaction is expected to be mild when trade begins on Wednesday.

"The market has shown little reaction to budgets over recent years; we expect this one to be little different," wrote de Garis.

In any case, futures pricing has the Australian stock market opening slightly lower on Monday. Banks' half-yearly results will help provide a snapshot of the domestic economy, along with their own health and that of their dividend policies.

Building approval data for March, released on Tuesday, will also give insights to the cooling residential property market in Australia, while retail sales data, released on Thursday, are a proven indicator of consumer activity and confidence.

Outside of Australia, US unemployment claims and manufacturing data will be closely watched for their implications for monetary policy.