November's flash consumer prices were revised down in the final data. The monthly reading dropped 0.1 percent, and the annual inflation eased to 1.3 percent, both readings a tick short of their respective provisional prints. Still, yearly inflation was still from October's final 0.9 percent, primarily due to higher rates of regulated energy products (from 3.9 percent to 7.4 percent) and non-regulated energy products (from minus 10.2 percent to minus 6.6 percent). Processed food including alcohol (from 1.7 percent to 1.9 percent), unprocessed food (from 3.4 percent to 3.8 percent), transport services (from 3.0 percent to 3.5 percent), and non-durable goods (from 0.9 percent to 1.4 percent) all also contributed.

Core inflation, excluding volatile items like energy and fresh food, was unrevised at 1.9 percent, up from 1.8 percent in October. Excluding just energy, the rate was 2.0 percent, up from 1.9 percent in October. The gap between goods and services decreased in November.

The HICP, which, unlike the CPI, accounts for seasonal factors like summer sales, fell 0.1 percent monthly, also less 0.1 percentage point below its flash estimate. This trimmed the annual rate to 1.5 percent, albeit still up from October's 1.0 percent.

Today's update puts the Italian RPI at 4 and the RPI-P at minus 6, indicating that overall economic activity is performing broadly as expected.

Consumer prices are expected to be unrevised at flat on the month and up 1.4 percent on the year.

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.