RBA boss Glenn Stevens will today weigh up the case for a rate cut.
ANOTHER round of weak economic data is not expected to push the Reserve Bank to cut interest rates again at its first board meeting of the year on Tuesday.
Building approvals for December were weaker than forecast, the ANZ job advertisements survey fell for the 11th straight month in January and inflation remain subdued, a series of economic indicators released on Monday showed.
At the same time, businesses were lowering their profit expectations for the June 2013 quarter, as reflected in a sharp fall in the Dun & Bradstreet Profit Expectations Index.
Meanwhile, National Australia Bank's online retail sales index slipped in December, an expected seasonal move that reflected earlier internet shopping during the Christmas season, NAB said.
The RBA is expected to point towards strengthening commodity prices and the improving US, European and Chinese economies - indicators it signalled as trending on the downside when it cut the cash rate to a low of 3 per cent in December.
"On balance, the case is that they can sit, wait and watch," Commonwealth Bank senior economist Michael Workman said.
"And maybe they can progress this argument that in December, the rate cut was provided on a reading of the economy both here and offshore that was a little bit more negative than it's actually turned out to be."
BT Financial Group chief economist Chris Caton said the central bank's board would want to look at further data before they continued the easing cycle, which has seen rates cut by 175 basis points since November 2011.
Financial market expectations of an interest rate cut stand at just 17 per cent, Credit Suisse data showed. Markets have priced in one 25-basis-points cut for the year, and a one-in-three chance of a second cut.
Job advertisements fell 0.9 per cent last month, a smaller dip than a revised 2.8 per cent fall in December, the ANZ survey showed.
ANZ's head of Australian economics and property research, Ivan Colhoun, said the results meant job advertising was "broadly unchanged", given the seasonal swings during December and January.
Job ads in Western Australia and Queensland continued to weaken, reflecting expectations that mining investment would peak in 2013.
Approvals to build new homes fell a seasonally adjusted 4.4 per cent in December to 12,767 units, Bureau of Statistics figures showed, against expectations of a 1 per cent rise.
Private sector housing approvals fell 3.3 per cent in December in seasonally adjusted terms, as the value of total buildings approved sank 1.9 per cent.
Mr Workman said the approval numbers were expected to lift over the next few months to about 13,000 units as the impact of the December rate cut kicked in.
The TD Securities-Melbourne Institute's measure of consumer prices edged up 0.3 per cent in January, after a rise of 0.4 per cent in December.
The annual pace of inflation lifted slightly to 2.5 per cent, in the middle of the Reserve Bank's 2 to 3 per cent target band, after hitting 2.4 per cent in December.
Mr Colhoun said he would be "very surprised" if the Reserve cut rates, but added that the board would continue to monitor non-mining industries.
"The big questions are still the same. Is there going to be enough improvement in the non-mining sectors of the Australian economy - housing, non-residential construction, manufacturing - to offset a slower profile for the mining economy?" he said.
A key indicator that will be released two days after the Reserve Bank's meeting, the unemployment rate for January, is forecast by economists to rise to 5.5 per cent from 5.4 per cent the month before.
"Giving that inflation is well behaved, if unemployment does continue to trend up, then there's no reason not to continue to ease," Mr Colhoun said.