Release Explanation: It measures the monetary value of all goods and services produced within a Country’s borders in a specific time period. GDP is calculated on an annual basis, is the broadest measure of activity, and the primary gauge of each economy’s overall health. It includes all Company and Personal consumption, government outlays, investments, and exports less imports, that occur within a defined territory.

Trade Desk Thoughts: The flash estimate showed that fourth quarter Euro-area GDP contracted 1.5%, the third consecutive quarter in which the economy contracted.

Compared with the fourth quarter of 2007, the Euro-area GDP fell by 1.2%. Taken individually, the biggest economies from the Euro-area declined at a record pace in the last quarter. Germany, France, Italy and Portugal saw the biggest declines in the last two decades, in the fourth quarter.

Out of the 15 countries that form the Euro-area in Q4 2008, Greece and Cyprus were the only two countries that reported growth. In particular, Estonia and Latvia’s GDPs, which are members of the Euro-area, the Q4 numbers contracted by a record 9.4% and 10.5% from one year earlier.

This is the first recession the Euro-area has experienced since its formation, back in 1999. Most likely, this very poor release will add additional pressure for the ECB to reduce its monetary stance. In comparison, the U.S. GDP contracted 1% in Q4, while next week the Japanese GDP is expected to shrink by almost 3%.

Forex Technical Reaction: Even though the GDP release is seen as one of the most important reports from a region, today, it did not spark any reaction in the currency market. The euro is trading barely above the Asian open price, after it failed to break anywhere tonight.