Economists are seeing more signs that monetary policy is gaining traction but most view an interest rate change as unlikely at the Reserve Bank's meeting on Tuesday.

But looking further ahead, some economists are predicting the RBA could begin to lift interest rates as early as October.

HSBC chief economist Paul Bloxham said optimism about China's future growth and recent improvements to the labour market meant the need for easing was over.

''Clearly the market still believes cuts are more likely than hikes but, in our view, much of this reflects downside global risks, rather than local developments,'' he said.

''Consumer sentiment and the housing market are improving in large part due to low interest rates.

''The next move may be up and we have pencilled in the next hike for Q4 this year.''

Credit Suisse data suggests the official cash rate will stay on hold at 3 per cent, the market giving an 8 per cent chance of a reduction of 25 basis points.

Citi economists Josh Williamson and Paul Brennan said the main development since the last RBA meeting was the escalation of the financial crisis in Cyprus, which was unlikely to influence domestic policy.