US stocks were sharply lower on Thursday, with the S&P 500 losing 1.4%, the Dow Jones sinking 540 points and the Nasdaq falling 2.2%, after recent GDP figures for the US showed the economy slowed sharply and price pressures mounted. The US economy expanded an annualized 1.6% in Q1 2024, below forecasts of 2.5% but core PCE prices increased by 3.7%, above expectations. Additionally, disappointing earnings reports from companies like Meta and IBM put further pressure on investors. Meta sank about 15% after the company issued a weak revenue guidance for the second quarter, which outweighed better-than-expected first quarter results. IBM also declined almost 8% after a revenue miss. On the other hand, Honeywell International gained about 0.6% after the company's earnings beat forecasts, led by the company’s aerospace franchise. Microsoft, Alphabet and T-Mobile are due to report their quarterly results today after the closing bell.

The GfK Consumer Climate Indicator for Germany rose to -24.2 heading into May 2024 from a marginally revised -27.3 in the previous period, above market forecasts of -25.9. It was the highest reading in two years, with income expectations surging to their top since January 2022 (10.7 vs -1.5 in April). Also, there were rises in both economic prospects (0.7 vs -3.1) and the propensity to buy (-12.6 vs -15.3). Simultaneously, the tendency to save increased to hit an extreme high (14.9 vs 12.4), as uncertainty about development in Europe's biggest economy persisted. Overall, while sentiment has recovered, it stayed at a subdued level. "In times of multiple crises and a lack of confidence in future development, there is still a lot of uncertainty among consumers," said Rolf Bürkl, consumer expert at NIM. He added that there was still no strong stimulus for domestic demand.

The core price index for personal consumption expenditures in the United States, which excludes food and energy, rose by an annualized 3.7% in the first quarter of 2024, accelerating from the 2% increase in the previous three-month period and above an estimate of 3.4%. Also, the headline index rose by an annualized 3.4%, accelerating from a 1.8% increase in the previous three-month period.

The US 10-year Treasury note yield rose to above 4.7%, the highest since early November, as recent data prompted traders to scale back their expectations regarding the timing of a Fed rate reduction, now completely factoring in the first cut by December. On one hand, the US economy grew much less than expected in Q1 but on the other inflationary pressures remained elevated. The US economy expanded an annualized 1.6% in Q1 2024, the least since a contraction in Q2 of 2022, and below forecasts of 2.4%. Meanwhile, the core PCE price index, surged by 3.7% in Q1, accelerating from the 2% increase in the previous three-month period and above the estimate of 3.4%. Finally, US jobless claims fell to 2-month low, underscoring the strength in labor market.

The number of people claiming unemployment benefits in the US fell by 5,000 to 207,000 in the week ending April 20th, the lowest in two months, and below market expectations of 214,000. This unexpected downturn provides more support for the notion of a tight labor market, adding leeway for the Federal Reserve to delay interest rate cuts to tackle stubborn inflation. The four-week-moving average, which reduces week-to-week volatility, declined by 1,250 to 213,250. In the meantime, the non-seasonally adjusted claim count eased by 7,363 to 201,619, as declines in New York (-4,174) and Pennsylvania (-2,796) offset increases in Massachusetts (3,565) and Rhode Island (1,719).

The central bank of Turkey left its key one-week repo auction rate steady at 50% on April 25th 2024, in line with market expectations, following an unexpected 500bps hike in March, and considering the lagged effects of the monetary tightening. Policymakers added that the tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range. However, interest rates will be increased in case a significant and persistent deterioration in inflation is foreseen. Inflation rate in Turkey accelerated to 68.50% in March, the highest since November 2022, from 67.07% in February. The central bank's survey of market participants showed expectations for end-year inflation were around 44% in April, compared to the central bank's forecast of 36%.