While global markets celebrated the US Federal Reserve's 50 basis point rate cut, Reserve Bank of Australia (RBA) Governor Philip Lowe faces the challenge of promoting a hawkish narrative next week. Australia's strong labor market and stubbornly high core inflation mean Lowe will need to be as cautious as other central banks.

Adam Boyton, chief economist at ANZ Bank, said the RBA is likely to consider either holding rates steady or raising them, retaining most of the hawkish language in its communications for the August meeting and beyond.

Boyton said the RBA is on track to cut rates in February next year, but risks are skewed towards a possible later cut.