Of greater concern is that the underlying price index has undershot the mid-point of the target range since global commodity prices peaked five years ago.
As the underlying wholesale price decreases it surely is expected that price of contracts and other derivatives will change to reflect the changes in the underlying price.
Producer price inflation, which feeds into overall inflation with a lag, meanwhile surged to an annual 3.5% rate from 1.6%, hinting at building pressure for underlying price growth.
Over the policy-relevant horizon, in an environment of modest growth in the euro area and well-anchored long-term inflation expectations, underlying price pressures should remain moderate.
For a put option, the option is in-the-money if the "strike" price is higher than the "underlying" price; then the intrinsic value is the strike price minus the underlying price.
