Inflation was just a little softer than expected in January but still stronger than in December. A provisional 0.4 percent monthly increase in prices saw the annual rate edge up from December's final 5.9 percent to 6.0 percent, a tick short of the market consensus but only 0.2 percentage points short of the October/November high.

The flash HICP largely followed suit, also posting a 0.4 percent monthly gain that lifted its yearly rate from 6.7 percent to 7.0 percent, now some 5.0 percentage points above the ECB's target.

However, the increase in the annual CPI rate was wholly attributable to energy (16.3 percent after 15.1 percent), in part due to the ending of fuel rebates, and food (13.2 percent after 12.1 percent). Overall manufactured products (4.6 percent) were only flat and services (2.6 percent after 2.9 percent) declined. Consequently, the core rate (5.3 percent in December) probably also fell.

French HICP inflation remains close to the bottom of the Eurozone ladder (Spain was 5.8 percent in January) but underlying trends are still worryingly firm so today's update will not sit particularly well with the ECB. The January data put the French ECDI at 0 and the ECDI-P at 10. Overall real economic activity is running ahead of market expectations but not by much.

Prices are seen up 0.5 percent on the month, lifting annual inflation from 5.9 percent to 6.1 percent.

The consumer price index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly and annual changes in the CPI represent the main rates of inflation. The national CPI is released alongside the HICP, Eurostat's harmonized measure of consumer prices. A flash estimate was released for the first time in January 2016 and is now published towards the end of each reference month.

The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. In countries where monetary policy decisions rest on the central bank's inflation target, the rate of inflation directly affects all interest rates charged to business and the consumer. As a member of the European Monetary Union, France's interest rates are set by the European Central Bank.

France like other EMU countries has both a national CPI and a harmonized index of consumer prices (HICP). The HICP is calculated to give a comparable inflation measure for the EMU. Components and weights within the national CPI vary from other countries, reflecting national idiosyncrasies.

Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets - and your investments. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion.

By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.