Prices for U.S. imports rose 0.1 percent in December following an unrevised 0.1 percent rise the previous month and compared to expectations for a 0.1 percent dip in the Econoday survey of forecasters. Higher import fuel prices, up 1.4 percent, drove the increase. Import prices rose 2.2 percent on the year.

Export prices were up 0.3 percent for the month compared with expectations for a 0.1 percent increase. Export prices were flat the prior month, unrevised. Export prices rose 1.8 percent from a year ago.

Within exports, prices for agricultural exports rose 0.5 percent in December following a 0.1-percent rise in November. Nonagricultural export prices were up 0.3 percent in December after being flat in November.

Import prices are seen down 0.1 percent on the month and export prices up 0.1 percent.

Import price indexes are compiled for the prices of goods that are bought in the United States but produced abroad and export price indexes are compiled for the prices of goods sold abroad but produced domestically. These prices, which exclude tariffs and taxes, measure underlying inflationary trends in internationally traded products.

Changes in import and export prices are a valuable gauge of inflation here and abroad. Furthermore, the data can directly impact the financial markets such as bonds and the dollar. The bond market is especially sensitive to the risk of importing inflation because it erodes the value of the principal (the original investment) which is paid back when the bond matures. It also decreases the value of the steady stream of interest rate payments on this type of security. Inflation leads to higher interest rates and that's bad news for stocks, as well. By monitoring inflation gauges such as import prices, investors can keep an eye on this menace to their portfolios.