10/15/2021
CONSUMER PRICE INDEX (CPI)
The consumer price index is calculated on the basis of a "basket" of goods and services of an average household in the country concerned.
This results in the consumer price index.
If you don't know: an index is calculated by throwing several values into a "pot".
The dax, for example, is the "pot" with the 30 largest companies in Germany.
The consumer price index is calculated in the same way - just with goods and services.
The consumer price index is considered to be a key measure of consumer behaviour and inflation.
It is thus an important economic indicator for the respective economy.
Moreover, the so-called 'inflation rate' is seen as a guideline for the vast majority of central banks, whose primary objective is - as we have learned - to ensure price stability.
If the consumer price index is higher than expected, this usually leads to a rising price of the currencies concerned & also to rising prices of indices and stock markets.
It is important to mention that this news produce often less volatile than expected.
Nevertheless... It is also worthwhile to look for volatile opportunities and - at best - to anticipate a movement.