CPI (Consumer Price Index)
CPI measures the change in the price of a basket of goods and services bought by households, and it is the headline gauge of inflation. Core CPI strips out food and energy to show the underlying trend. Because central banks set interest rates to control inflation, a CPI surprise moves currencies quickly and is one of the highest-impact releases on the calendar.
Full explanation
CPI is published monthly by national statistics agencies and is compared against consensus forecasts on both month-on-month and year-on-year measures. Markets usually react to core CPI and to the deviation from forecast rather than the absolute level. Volatility spikes at the release and spreads widen, so many traders stand aside for the first minutes and trade the resulting structure instead of the initial spike.
Why traders watch it
CPI drives rate expectations, and rate expectations drive currencies. A hotter print supports the currency by implying tighter policy; a cooler print does the opposite.
Related indicators
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Quarterly change in prices for merchandise exports shipped from Australia, a key terms-of-trade indicator.
Australia Import Price Index Quarter-over-Quarter
Quarterly change in prices for merchandise imports landed in Australia, used to assess imported inflation pressure.
Australia Private Sector House Approvals Month-over-Month
Monthly change in Australian private-sector house approvals, an early signal of housing construction activity.
Gross Domestic Product Growth Rate
GDP growth measures the inflation-adjusted change in an economy’s output over a quarter or year.
Harmonised Index of Consumer Prices Annual Inflation Rate
HICP annual inflation measures year-on-year consumer price changes using Europe’s comparable inflation index.
NFP (Non-Farm Payrolls)
Non-Farm Payrolls reports the change in US employment excluding farm workers, published on the first Friday of most months. It arrives alongside the unemployment rate and average hourly earnings, and is the single most watched labour release in the world. Surprises move the US dollar, gold and equity indices sharply within seconds of publication.