Australia's headline consumer price index (CPI) is expected to stay flat at 2.4% year on year, with core inflation remaining stable, according to a Morgan Stanley research report on June 20.

Fuel prices should continue to be a modest drag while attention turns to housing and services sectors, following a stronger-than-expected April reading and increased wage growth in the first quarter, the research said.

The monthly CPI indicator report is slated for release on Wednesday at 11:30 am Sydney time.