The preliminary flash data were unrevised in the second look at first quarter GDP. Total output was up 0.3 percent versus the fourth quarter of 2023 and 0.4 percent on the year. The increase means that the economy emerged from a very minor recession in the second half of 2023.

Within the quarterly advance, France and Germany expanded 0.2 percent, Italy 0.3 percent and Spain 0.7 percent, all rates matching their earlier estimates. Elsewhere, Ireland (1.1 percent) posted the strongest gain and in so doing moved out of recession. Latvia and Lithuania (both 0.8 percent) also had a good quarter but Estonia (minus 0.4 percent) contracted again and the Netherlands (minus 0.1 percent) also recorded negative growth.

In sum, the unrevised first quarter report provides further evidence that the Eurozone economy is starting to recover from the effects of earlier ECB tightening. This will not surprise the central bank but it will help to ensure that it keeps a very wary eye on a still very tight labour market. That said, today's report should not prevent key interest rates being cut next month. Today's updates put the Eurozone RPI at 36 and the RPI-P at 40. Both readings show economic activity in general running well ahead of market expectations.

No revisions are expected to the preliminary flash data, leaving quarterly growth at 0.3 percent and the yearly change at 0.4 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.