M3 Harmonized Index of Consumer Prices

I’ve rcently learned that the M3 Harmonized Index of Consumer Prices is one of the most important indicators in determining the sentiment in trading of the EURO because Germany represents over 30 percent of the whole of Europe GDP.  The HICP is basically an leading indicator of inflation and price stability for the ECB. The euro area HICP is a weighted average of price indices of nations who use the euro. Based on this, the main function of the ECB is to maintain price stability which is defined as keeping the HICP below but close to 2% over any given period of time.