Monday’s major Euro-zone data: Consumer Price Index (CPI)

Definition : CPI is a measure of the change in the purchasing power of individuals, or the change of average price level of a fixed basket of goods and serviced purchased by individuals. The data is reported monthly, and most of monthly change in CPI is caused by fluctuations in the food and energy components. Thus core CPI data excludes food and energy components.

Importance: Rising inflation is an indicator for central banks to increase the interest rates, which lead to increase the value of currency, and lower the bond markets. Also, since increasing inflation leads higher interest rates, it will cause lower corporate profits and lead decreases in stock markets.

Previous Data: 0.3% (MoM December), 0.7% (YoY December)

Expectation: -1.1% (MoM January), 0.7% (YoY January)