The latest Consumer Price Index result showed consumer prices in Australia rose in the March quarter at their slowest pace in 14 years.
Headline CPI rose by just 0.1%, well below market expectations of 0.6%, and cutting annual inflation to just 1.6%.
Even allowing for one-off factors, core inflation was comfortably at the bottom of the Reserve Bank of Australia's target band of 2% - 3%.
Radio New Zealand's Sydney correspondent says that is seen by the market as setting the seal on the bank this week resuming its stalled monetary policy easing campaign. The only question being over the size of the rate cut - 25 or 50 basis points.
The RBA board is to meet on Tuesday. The official cash rate is currently 4.25%.