Final CPI figures for July confirmed both the flash reading and the Econoday consensus of a seasonally adjusted 0.2 percent gain over June's 0.4 percent increase, while increasing 1.0 percent from a year ago, matching the change seen in June. Core inflation was 0.3 percent higher in July and up 1.5 percent year-on-year.

Prices for services rose 1.3 percent in July, led by a 10.2 percent increase in transportation costs, as airfares increased 7.6 percent on the month. Compared to July of last year, services cost 2.5 percent more.

Manufactured goods prices painted a different picture, falling 2.4 percent in July and 0.2 percent from a year ago. The sector has been dogged by contracting order books and flagging demand, with other indicators pointing to price cutting in order to maintain market share.

Energy prices are up 0.9 percent over June, although 7.2 percent lower than July of last year, extending the 6.7 percent year-on-year decline in June. One of the contributing factors was natural gas prices which slowed to 5.7 percent in July from 17 percent, year-on-year, in June due to a basis effect when comparing to last year's prices.

The HICP measure used for comparing inflation across European economies was up 0.3 percent in July month-on-month and 0.9 percent from their year-ago level.

Clearly there are no systemic prices pressures evident in the French economy at the moment, but the dichotomy between the process for services and manufactured products is something to consider. Consumers can more easily put off purchases of manufactured goods, but not so much for services which if the latter continues to trend higher could take a bite out of discretionary income and, by extension, retail sales.

No change expected in the final July reading from the flash with CPI up 0.2 percent on the month in July and up 1.0 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 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.