Italian economic growth was unrevised last quarter. GDP was only flat versus the previous period and up a modest 0.4 percent on the year. The quarterly rate was down from 0.2 percent in the second quarter.

On the quarter, gross fixed capital formation decreased 1.2 percent but was more than offset by a 1.4 percent bounce in household consumption. Net foreign trade had a negative effect as exports fell 0.9 percent while imports rose 1.2 percent.

In line with much of Europe, the Italian economy is struggling to gain momentum, not least due to the ongoing weakness of the manufacturing sector. Accordingly, with inflation also well below 2 percent, the domestic picture strongly supports a probable cut in ECB interest rates next week. Today's update puts the Italian RPI at 4 and the RPI-P at minus 19. Real economic activity is surprising slightly on the downside.

No revisions are expected to the provisional data which showed zero quarterly growth and a 0.4 percent yearly rate.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. A flash estimate, providing just quarterly and annual growth rates together with some limited qualitative information on sector output, is usually available 6-7 weeks after the reference quarter.

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 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 lead to increased demand for a local currency. However, inflationary pressures put pressure on a currency regardless of growth.