Continued euro-zone worries, along with the continuing volatility of United States sharemarkets, will keep the Reserve Bank on notice if, as expected, it holds its official cash rate (OCR) at 2.5% on Thursday.
US stocks closed firmly in the red over the weekend amid fears Greece might default on its debt and following news that the European Central Bank's Juergen Stark will resign.
For the week, both the Dow and Standard and Poor's 500 plunged more than 5% each and the Nasdaq slumped more than 4%. The Dow is close to the psychologically important 11,000 level.
Market reaction to US President Barack Obama's jobs plan has also been disappointing for investors.
Westpac chief economist Dominick Stephens said the Reserve Bank made its immediate intentions clear in July when it said it saw little need for the March "insurance cut" to remain in place much longer.
Since then, the near-term global outlook had taken a nasty turn as fears of sovereign debt default had spilled over into a broader range of markets.
"Even if authorities are able to contain the damage through decisive action, it will be some time before global risks could be said to have receded. Our view is that the Reserve Bank will hold off on rate hikes until December," he said.
Unlike July's terse media release, the Monetary Policy Statement on Thursday would have to expand on the medium-term outlook for inflation, which was becoming increasingly worrying.
The economy was recovering faster than realised, perceptions of inflation were not "well-behaved" and some of the Reserve Bank's crucial inflation-dampening assumptions were looking shaky, Mr Stephens said.
ASB chief economist Nick Tuffley said the OCR increase for September was sidelined by ongoing market turmoil.
Growth in the US and Europe had abruptly lost momentum.
"Financial risks remain elevated and escalation of Europe's debt problems into a full-blown crisis can no longer be completely dismissed. Given the global environment in particular, waiting to see if the risks settle down is prudent."
ASB continued to forecast a 0.5% rise in the OCR in December.
An earlier move was possible but would need a considerable global risk turnaround, sufficient that the Reserve Bank could be confident it would endure, he said.
