The Reserve Bank is almost certain to leave the cash rate at a record low when its board meets this week in the face of a deteriorating situation in Victoria.
Economists expect the central bank will keep the cash rate at 0.25 per cent on Tuesday, and where it has stood since March while maintaining its bond-buying program to pump liquidity into the Australian financial system.
The Reserve Bank will also release its quarterly statement on monetary policy on Friday and all eyes will be on its latest economic forecasts.
"Since the bank's last forecast update in May, data have shown the direct hit to the economy from the first wave of the pandemic was not as bad as initially feared," National Australia Bank economist Kaixin Owyong says.
"In our view, risks to the recovery remain tilted to the downside, particularly as the second wave continues to unfold."
In May, the RBA forecast annual economic growth to slump eight per cent in the year to June as the nation suffers its first recession in nearly 30 years.
The June quarter national accounts will be released on September 2.
Tuesday will also see the release of the weekly consumer confidence survey from the ANZ and Roy Morgan, which has fallen for five straight weeks, in the wake of a rise in COVID-19 deaths in Victoria and NSW.
Still, retail spending has been surprisingly upbeat since an initial slump when the pandemic first hit.
Retail spending data for June on Tuesday is expected to confirm the recently released preliminary figures from the Australian Bureau of Statistics with a 2.4 per cent rise in the month.
This builds on the 16.9 per cent rebound in May after the hefty 17.7 per cent plunge in April.
However, economists expect quarterly retail trade figures also on Tuesday that will feed into the June quarter national accounts will decline by 1.5 per cent.
Westpac economists are expecting an even weaker result with a drop of 3.2 per cent, which would be the biggest decline since the introduction of the GST 20 years ago.
Ahead of a busy data week, which also includes house price and job advertising figures on Monday, as well as the start of the Australian company reporting season, the share market is expected to get off to a cautiously positive start.
The August Australian shares futures index last traded at 5926 points, up from 5911 previously.
This follows gains on Wall Street on Friday where major tech stocks made strong gains after a number of quarterly results announcements.
The Dow Jones Industrial Average rose 0.4 per cent, to 26,428.32, while the tech-laden Nasdaq Composite gained 1.49 to 10,745.28.
Even so, AMP Capital chief economist Shane Oliver sounded a note of warning.
"It's going to be the worst reporting season in years with consensus expectations for a 21 per cent slump in earnings due to the hit from coronavirus, which will be the biggest fall since the GFC,"Dr Oliver said.
On Friday the Australian benchmark S&P/ASX200 index dropped two per cent to 5,927.8 points, the worst performance in five weeks.
Major companies reporting this week include Insurance Australia Group, global media group News Corp, real estate company REA and sleep apnea company ResMed.
Australian Associated Press