The preliminary flash data proved slightly weaker than expected. A 0.1 percent quarterly fall in GDP was the first decline in total output in three years and reversed half of the limited gain seen in the previous period. Annual growth dropped from 0.5 percent to just 0.1 percent, its worst print since the first quarter of 2021.

The overall quarterly decline reflected contractions in a number of countries, notably Germany (0.1 percent), Ireland (1.8 percent), Austria (0.6 percent), and Estonia (0.2 percent) which saw a remarkable seventh successive drop. Spain (0.3 percent) posted moderately respectable growth but France (0.1 percent) only just kept its head above water and Italy (0.0 percent) stagnated.

In sum, the third quarter data mean that the Eurozone economy has been essentially flat since the third quarter of last year. Amongst the countries reporting today, only Austria and Estonia find themselves in recession but this could easily change this quarter when, on current trends, the region has a whole could post a second successive decline. Taken together with the sharp fall in October inflation just announced, the data latest increase the chances that key ECB interest rates have peaked. To this end, today's reports trim the Eurozone RPI to minus 15 and the RPI-P to minus 14, both measures showing overall economic activity lagging market expectations.

Third-quarter Eurozone GDP is expected to hold unchanged for year-over-year growth of only 0.2 percent. These would compare with respective second-quarter growth rates of 0.1 and 0.5 percent.

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.