The final data for the third quarter left unrevised the flash 0.1 percent quarterly decline in GDP. This was the first contraction in total output since the fourth quarter of 2022 but means that total output has been flat since the third quarter of that year.

The overall quarterly decline reflected contractions in a number of countries, notably both Germany (0.1 percent) and France (also 0.1 percent), alongside Ireland (1.9 percent), Estonia (1.3 percent), Finland (0.9 percent), Austria (0.5 percent), the Netherlands and Slovenia (both 0.2 percent) and Luxembourg (0.1 percent). Austria, Estonia, Luxembourg and the Netherlands are all in technical recession. Spain saw modest growth of 0.3 percent while Italy was revised up to 0.1 percent.

The national accounts data showed household spending and government consumption rising 0.3 percent but fixed investment was only flat. Exports fell 1.1 percent and imports 1.2 percent making for a broadly neutral net impact so the headline dip was due to inventories which subtracted 0.3 percentage points.

In sum, the final data probably leave the overall Eurozone economy on course for recession by year-end. Accordingly, with inflation currently falling faster than typically forecast, financial markets will be all the more enthusiastic about possible interest rate cuts in 2024. Today's report also leaves the Eurozone RPI at minus 5 and the RPI-P at 13. Overall economic activity is essentially matching market expectations but this masks slightly stronger than anticipated developments in the real side.

No revisions are expected in the final report, leaving a 0.1 percent quarterly contraction and annual growth of 0.1 percent.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy and is usually released early in the third month after the reference period. Following two provisional (flash) estimates containing only limited information, this report provides the first full look at the national accounts for the region.

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 a treasure-trove of 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, and price (inflation) indexes 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 anemic 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 typically lead to increased demand for a local currency. However, inflationary pressures can put downside pressure on a currency regardless of growth. For example, if inflation remains above the ECB’s near-2 percent target for long enough, worries about the impact of lost competitiveness on the merchandise trade balance could prompt investors to switch to an alternative currency.