Consumer prices are expected to slow in October to 1.0 percent year-on-year from 1.2 percent in September, according to preliminary estimates. Compared to a month ago, prices are expected to pick up a marginal 0.1 percent after falling 1.0 percent in September.

Energy prices continue to fall, dropping 5.6 percent year-on-year in October, extending the 4.4 percent decline last month, driven by gasoline and petroleum products. Food price gains slowed during the reporting month, gaining 1.3 percent from October of last year, down from 1.7 percent in September. This was helped by a 2.2 percent drop in fresh food prices, a sharp contrast to the 1.6 percent increase in September.

Prices for services remain elevated, rising 2.4 percent year-on-year in September and October, while those for manufactured products are seen falling 0.5 percent in October, year-on-year, after a 0.4 percent yearly drop in September. The manufacturing sector has been under pressure with other reports noting price discounting due to competitive pressures and companies attempting to hold on to market share.

The HICP measure used to compare inflation among European economies is also seen slowing October, to 0.9 percent year-on-year after a 1.1 percent increase the previous month. After falling 1.1 percent month-on-month in September, prices are seen rebounding to 0.1 percent in October. The sharp contrast in the monthly data is due to increased transportation prices and, to some degree, manufactured goods prices.

Today's result, while only for France, shows the lack of inflationary pressures that could concern the ECB and support the central bank's decision earlier this week to maintain its monetary policy stance. PPI data, also released today, also show no evidence of pipeline inflation heating up.

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.