The monthly consumer price was revised in May. A final 0.1 percent monthly decrease was 0.1 percent less than the provisional print and the consensus. The annual inflation fell a tick from the preliminary May outturn to 1.6 percent.

Both the monthly and the annual final HICP rates were revised in May, showing a 0.1 percent decrease on the month and a yearly rate of 1.7 percent, down from April's final yearly rate of 2.0 percent and within the ECB's target.

May's slowdown in annual CPI rate was partly due to a fall in the growth of regulated energy prices (from 31.7 percent to 29.3), non-regulated energy products (from minus 3.4 percent to minus 4.3 percent), unprocessed food (from 4.2 percent to 3.5 percent), services related to transport (from 4.4 percent to 2.6 percent), and recreation and personal care ( from 3.6 percent to 3.1 percent). This offset growth in prices of processed foods (from 2.2 percent to 2.7 percent).

Core inflation decreased to 1.9 percent, down from 2.1 percent in April.

The final May data show that inflation in Italy is nothing much for the ECB to worry about.

The consensus looks for no revision from the flash at 0.0 percent on the month and 1.7 percent on 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.