Consumer prices are seen moderating slightly in May as pressures from services are expected to abate, according to preliminary results. Compared to May of last year, the CPI will increase 0.7 percent after a 0.8 percent rise in April. On a month-on-month basis, prices are expected to be down 0.1 percent in May from April.

Prices for services, which account for slightly more than half of the overall index are expected to increase 2.1 in May from a year ago, after rising 2.4 percent in April from their year-ago level. Food prices are seen increasing at a marginally higher rate in May (+1.3 percent) than in April (+1.2 percent) year-on-year. But French consumers will be pleased to see fresh food prices rising a far more modest 1.7 percent in May compared to a year ago, than the 4.0 percent gain reported in April.

Energy prices will continue to have a moderating effect on the overall price index as costs are seen down 8.1 percent year-on-year in May, extending the 7.8 percent decline in April.

Harmonized consumer prices used for comparison among EU countries are expected to rise 0.6 in May, year-on-year, slowing from 0.9 percent in April. Compared to April when prices rose 0.7 percent from the previous month, May prices are expected to contract 0.2 percent.

Price pressures remain subdued for the time being. But despite the EU getting a reprieve until July 1 from additional tariffs, uncertainty is still very much on the horizon.

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.