| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Month over Month | -0.2% | -0.2% to -0.2% | -0.2% | -0.2% |
| Year over Year | 1.6% | 1.6% to 1.8% | 1.6% | 1.6% |
| HICP - M/M | 1.3% | 1.3% | ||
| HICP - Y/Y | 1.8% | 1.8% |
Highlights
Final consumer prices for September no change from the consensus and flash estimate, coming in at minus 0.2 percent month-on-month and 1.6 percent year-over year. It is down 0.3 percent from August's month-on-month final but held steady year-on-year.
The monthly HICP grew 1.3 percent on the month, up from August's 0.2 percent decline due to the end of summer clothing sales. The annual rate was 1.8 percent, still below the ECB's target.
September's annual CPI rate was partly due to mixed results. There was a decline in prices of transport (from 3.5 percent to 2.4 percent), and unprocessed food (from 5.6 percent to 4.8 percent). This offset the rise in the prices of regulated energy products (from 12.9 percent to 13.9 percent), non-regulated energy products (from minus 6.3 percent to minus 5.2 percent).
Core inflation was 2.0 percent in September, down 0.1 percent from August. This latest update leaves the RPI at 11 and the RPI-P at 19, meaning that economic activity in Italy is moderately outperforming market expectations.
The monthly HICP grew 1.3 percent on the month, up from August's 0.2 percent decline due to the end of summer clothing sales. The annual rate was 1.8 percent, still below the ECB's target.
September's annual CPI rate was partly due to mixed results. There was a decline in prices of transport (from 3.5 percent to 2.4 percent), and unprocessed food (from 5.6 percent to 4.8 percent). This offset the rise in the prices of regulated energy products (from 12.9 percent to 13.9 percent), non-regulated energy products (from minus 6.3 percent to minus 5.2 percent).
Core inflation was 2.0 percent in September, down 0.1 percent from August. This latest update leaves the RPI at 11 and the RPI-P at 19, meaning that economic activity in Italy is moderately outperforming market expectations.
Market Consensus Before Announcement
No revision expected from the flash.
Definition
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.
Description
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.
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.
