Stella Qiu

Last month's rate cut injected some confidence in an anemic market which had finally slowed down after a year of hitting record prices, helped by elevated levels of immigration and limited housing supply.

Australian consumer prices dipped month-on-month in January, dragged lower by a slowdown in housing costs and a drop in holiday travel, an outcome that should help reassure policymakers that inflation is heading in the right direction.

A look at the day ahead in European and global markets from Stella Qiu

Australia's central bank is cautious about cutting rates further given cost pressures in a hot labour market, but it will respond if inflation slows more quickly than expected, senior officials said on Friday.

Australian wages rose at the slowest annual pace in more than two years in the fourth quarter even as unemployment stayed near historic lows, suggesting the strong labour market was not a bar to further declines in inflation.

Australia's central bank expects underlying inflation to fall faster than previously expected as it downgraded the economic outlook, although a still tight labour market is likely to create some lingering price pressures.

Australia's centre-left Labor government has asked financial regulators to help would-be home buyers with student loans to enter the property ladder as it faces a tough election where sky-high housing costs have seen its popularity plunge.

Australian household spending rose for a third straight month in December due to higher discretionary spend, data showed on Tuesday, suggesting consumption is picking up after a long fallow period.

A look at the day ahead in European and global markets from Stella Qiu

Australian employment sped past forecasts in December although the jobless rate ticked higher as many more people went looking for work - the combination of trends signalling a healthy labour market that leaves alive the chance of a near-term cut in rates.