The Reserve Bank board is expected to hike interest rates by another 25 basis points on Tuesday, taking the cash rate to 3.35 per cent.

Dr Chalmers told a Chifley Research Centre forum in Canberra on Sunday the inflation challenge was the main focus of both the Reserve Bank and the government.

"Our job is to provide cost of living relief where we can without adding to inflation," he said.

"This inflation problem and higher interest rates are difficult enough without the goverment making it harder."

Nomura Australia economist Andrew Ticehurst said another rate hike by the US Federal Reserve - albeit a smaller quarter-point increase - and likely cash rate increases by other major central banks supported the case for another RBA hike in February.

And underlying inflation, which excludes large price rises and falls, was surprisingly strong in the December quarter, lifting 6.9 per cent annually.

Looking back at RBA communications in December, Mr Ticehurst said the central bank alluded to more rate hikes "over the period ahead".

"Ultimately, we think the governor is attempting to balance cooling growth against uncomfortably high inflation and the risk of a break-out in wages and inflation expectations," he said.

"But equally, the RBA appears very keen to avoid recession, and naturally, would not wish to be 'blamed' for delivering one."

Nomura analysts anticipate another 25bp lift, and that a larger hike is more probable than a pause.

The RBA will also release updated economic forecasts in a statement of monetary policy due out on Friday.

To kick off the week, the Melbourne Institute will release its monthly inflation gauge.

On Tuesday, the Australian Bureau of Statistics will release December international trade data.

St George economists expect to see the trade balance edge up slightly from $13.2 billion in November to $13.5 billion.

On Friday, the ABS will release business start-up and exit data, as well as the monthly business turnover indicator.

Major US stock indexes ended lower on Friday after surprisingly strong jobs data sparked concerns about aggressive Federal Reserve action, while investors digested a mixed bag of megacap company earnings reports.

The Dow Jones Industrial Average fell 127.93 points, or 0.38 per cent, to 33,926.01, the S&P 500 lost 43.28 points, or 1.04 per cent, to 4,136.48 and the Nasdaq Composite dropped 193.86 points, or 1.59 per cent, to 12,006.96.

For the week, the S&P 500 rose 1.6 per cent, the Dow slipped 0.15 per cent, and the Nasdaq gained 3.3 per cent.

Australian futures rose 12 points, or 0.16 per cent, to 7513.

The benchmark S&P/ASX200 index on Friday finished up 46.5 points, or 0.62 per cent, to 7,558.1, its highest close since April 21.

Australian Associated Press