The provisional data were revised a little softer in the final report for April. Consumer prices rose 0.1 percent on the month, a tick less than previously reported and trimming annual inflation from March's final 1.0 percent to just 0.8 percent.

The flash HICP was similarly lowered by 0.1 percentage point to show a 0.5 percent increase on the month and a 0.9 percent yearly rate, now fully 1.1 percentage below the ECB's target.

April's fall in annual CPI inflation was largely attributable to non-regulated energy (minus 13.9 percent after minus 10.3 percent), transport (2.7 percent after 4.5 percent) and miscellaneous services (1.8 percent after 2.3 percent). Regulated energy (minus 1.3 percent after minus 13.8 percent) and recreation (3.8 percent after 3.2 percent) provided the main boost. Consequently, core inflation was also revised down a tick to 2.1 percent.

The final April report leaves Italy close to the bottom of the Eurozone inflation ladder and waving a green flag for a June interest rate cut from the ECB. The data also leave both the Italian RPI (minus 21) and RPI-P (minus 6) in negative surprise territory.

No revisions are expected to the provisional data, leaving the yearly CPI inflation rate at 0.9 percent, down from its 2.2 percent final March reading.

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 provide widely used measures of inflation. A provisional estimate, with limited detail, is released about two weeks before the final data are reported.

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 such as the Italy 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, Italy's interest rates are set by the European Central Bank.

Italy like other EMU countries has both a national CPI and a harmonized index of consumer prices (HICP). Components and weights within the national CPI vary from other countries, reflecting national idiosyncrasies. The core CPI, which excludes fresh food, is usually the preferred indicator of short-term inflation pressures.

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.