The preliminary flash data were unrevised in the second look at first quarter GDP. A minimal 0.1 percent quarterly increase in GDP matched the earlier estimate meaning that the economy at least kept its head above water. However, to all intents and purposes, total output has stagnated since expanding 0.4 percent in the third quarter of 2022. Indeed, annual growth slowed from 1.8 percent to just 1.3 percent and GDP was only 2.5 percent stronger than its pre-pandemic level at the end of 2019.

There are still no GDP expenditure components available in today's estimate but national data show that weak consumer spending was a major factor capping the expansion while net exports probably provided a boost. In terms of quarterly growth rates, Germany (0.0 percent) failed to provide any help and France (0.2 percent) was again very sluggish. However, Italy and Spain (both 0.5 percent) had a decent period as, in particular, did Portugal (1.6 percent) and Finland (1.1 percent) which emerged from recession. Elsewhere, Ireland (minus 2.7 percent) saw the steepest decline ahead of Austria (minus 0.3 percent).

Today's update confirms a weak start to 2023 by the Eurozone economy. Indeed, with the region's ECDI (minus 42) and ECDI-P (minus 45) both well in negative surprise territory, overall economic activity is running well short of market expectations. However, as the ECB has already made very clear, this will not stop the central bank raising interest rates.

No revisions are expected but surprisingly weak industrial production in March makes for downside risk.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. There are two preliminary estimates which are based on only partial data. The first is the preliminary flash, introduced in April 2016 and limited to just quarterly and annual growth statistics for the region as a whole. This is issued close to the end of the month immediately after the reference period. The second flash report, released about two weeks later, expands on the first to include growth figures for most member states but still provides no information on the GDP expenditure components.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market Investors like to see healthy economic growth because robust business activity translates to higher corporate profits. The GDP report contains information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. These data, which follow the international classification system (SNA93), are readily comparable to other industrialized countries. GDP components such as consumer spending, business and residential investment illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

Each financial market reacts differently to GDP data because of their focus. For example, equity market participants cheer healthy economic growth because it improves the corporate profit outlook while weak growth generally means anemic earnings. Equities generally drop on disappointing growth and climb on good growth prospects.

Bond or fixed income markets are contrarians. They prefer weak growth so that there is less of a chance of higher central bank interest rates and inflation. When GDP growth is poor or negative it indicates anaemic or negative economic activity. Bond prices will rise and interest rates will fall. When growth is positive and good, interest rates will be higher and bond prices lower. Currency traders prefer healthy growth and higher interest rates. Both lead to increased demand for a local currency. However, inflationary pressures put pressure on a currency regardless of growth.