The Reserve Bank will keep interest rates steady well into 2017 if commodity and oil prices remain at their current levels or rise, according to HSBC.
The RBA has cut rates twice this year to take the cash rate to a record low of 1.5 per cent, attempting to overcome inflation that sits at a 17-year low.
HSBC economists say consumer prices could rise to be back within the RBA's two to three per cent target band by the beginning of 2017.
The recent lift in commodity and oil prices means both underlying and headline inflation have likely passed their recent trough, they said.
"Although this still means that year-on-year inflation is likely to be below the two to three per cent target band for the next couple of quarterly prints, as long as the RBA believes it will head back to the target band over time we expect that they will not feel the need to cut further," the HSBC economists said.
"Our central case has the RBA on hold in coming quarters."
Commodity prices have risen 26 per cent since January and oil prices are at their highest level in over a year, which should increase Australia's national income, supporting corporate profits, government tax income and wages, and ultimately boost inflation, the economists said.
Rising oil prices will also push up petrol prices and increase the cost of transport and energy, another inflationary pressure.
The next official inflation figures, for the September quarter, will be released by the Australian Bureau of Statistics on October 26.
The Reserve Bank makes its next interest rate decision a week later, on November 1.
