The Reserve Bank will give its views on the budget when its board meets this week, as will consumers in the latest weekly confidence survey.

The Reserve Bank of Australia will get the opportunity to respond to the federal government’s pre-election budget when it holds its monthly board meeting.

The inclusion of an $8.6 billion support package in the budget at a time of already heated inflation has raised concern among some economists.

Financial markets are pricing in the risk of an interest rate rise by the RBA as early as May and will be watching the wording of governor Philip Lowe’s post-meeting statement on Tuesday very closely.

But Westpac chief economist Bill Evans expects the RBA will stick to its “patient” approach to monetary policy, keeping the cash record at a record low 0.1 per cent.

“We do not think there is anything in the budget that could prompt the board to begin the tightening cycle earlier than the August date we have advocated for some time,” Mr Evans said.

Treasury secretary and RBA board member Steven Kennedy told senators last week he expects annual inflation will accelerate to 4.25 per cent in the March and June quarters compared to 3.5 per cent in December.

This is well above the RBA’s 2 to 3 per cent inflation target.

Dr Kennedy said around one percentage point of this rise is due to higher fuel prices.

At the same time, he told Senate estimates the direct economic cost of the floods along the east coast of Australia is expected to cut economic growth by about a 0.5 percentage point in the March quarter.

The week kicks off with the ANZ’s monthly job advertisements series for March – a guide to future employment growth.

Job ads already stand at a 13.5-year high, backing both the RBA and Treasury’s expectation of the unemployment rate falling sustainably to 3.75 per cent later this year, its lowest level since 1974.

The jobless rate currently stands at 4 per cent.

The weekly ANZ-Roy Morgan consumer confidence survey is due on Tuesday, which will capture the post-budget mood of Australians.

Confidence – a pointer to future household spending – has deteriorated to an 18-month low in recent weeks amid devastating floods and rising cost-of-living pressures, notably the spike in petrol prices above $2 a litre.

Consumer inflation expectations have also spiked to their highest since June 2012 at 6.4 per cent.

The Australian Bureau of Statistics will release international trade figures for February on Thursday.

The consensus among economists points to a surplus of $12.1 billion for February, only slightly smaller than the $12.9 billion posted in January.

Meanwhile, Australian shares look set for a firm start to the week with Wall Street notching a modest gain after the latest US employment report.

It showed employers added 431,000 jobs last month.

Although this was slightly below economists’ expectations for 477,500, the report also revised earlier months’ data to reflect more strength.

The US unemployment rate improved to 3.6 per cent from 3.7 per cent.

The S&P 500 rose 15.45 points, or 0.3 per cent, to 4545.86.

The Dow Jones Industrial Average added 139.92 points or 0.4 per cent, to 34,818.27, while the Nasdaq gained 40.98 points, or 0.3 per cent, to 14,261.50.

In response, Australian share futures rose 19 points or 0.25 per cent to 7488.

On Friday, the Australian benchmark S&P/ASX200 index closed down 5.8 points, or 0.08 per cent, to 7493.8.

-AAP