Euro Area CPI Excluding Tobacco
Published:
A monthly euro-area inflation measure that removes tobacco prices from the consumer-price basket.
Full explanation
Euro Area CPI Excluding Tobacco is Eurostat's Harmonised Index of Consumer Prices (HICP) for the euro area with tobacco products removed from the basket. Calendars show a month-on-month (MoM) and a year-on-year (YoY) reading. It is published only with the final (not the flash) euro-area HICP release, around the middle of the month after the reference month. Because tobacco has a small weight, it usually moves very closely with headline euro-area HICP.
Why traders watch it
Inflation releases can influence expectations for European Central Bank policy, euro-area government bond yields and the euro. This tobacco-adjusted measure can help analysts distinguish movements in broad consumer prices from those linked specifically to tobacco prices and related tax changes.
Market interpretation
- EUR currency pairs
- Unexpected inflation data can alter views on euro-area interest-rate expectations and affect the euro.
- Euro-area government bonds
- Inflation surprises can contribute to changes in expected policy rates and bond yields.
Stronger vs weaker outcomes
A higher-than-expected monthly reading may be viewed as firmer tobacco-adjusted price momentum, while a lower-than-expected result may be viewed as softer momentum. Its market relevance can depend on the headline HICP result, core measures, services inflation and the source of the surprise.
A higher-than-expected month-on-month reading may be interpreted as firmer tobacco-adjusted inflation momentum, subject to the broader inflation breakdown.
A lower-than-expected month-on-month reading may be interpreted as softer tobacco-adjusted inflation momentum, subject to the broader inflation breakdown.
Higher-than-expected may suggest firmer tobacco-adjusted price momentum; lower-than-expected may suggest softer momentum.
Typical volatility
Moderate. Excluding tobacco does not make this a standard core-inflation measure, because other volatile or policy-sensitive categories remain in the index. Monthly changes can be affected by seasonal price patterns, weighting changes, indirect taxes and revisions.
Trading considerations
- Compare the result with the euro-area headline HICP and measures excluding energy, food, alcohol and tobacco.
- Check whether the release is a flash estimate or a later detailed update, as revision stage affects interpretation.
- Allow for potentially thinner liquidity and wider spreads around major euro-area inflation releases.
- Consider revisions, seasonal effects, changes in indirect taxes and annual basket-weight updates.
Educational guidance only — never a trading signal or recommendation.
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