Asian equity markets fell on Thursday, tracking a sharp decline in US stock futures as Meta Platforms plunged in after-hours trading on a weak revenue guidance for the second quarter. Investors also braced for US GDP data due later today that could influence the outlook for Federal Reserve monetary policy. In Asia, South Korea’s economy expanded 3.4% in the first quarter, the strongest growth since the fourth quarter of 2021. Elsewhere, the Bank of Japan kicks off its two-day monetary policy meeting today, with traders watching for any hawkish signals as the yen weakened past 155 per dollar. Shares in Japan, South Korea, Hong Kong and China all declined. Markets in Australia and New Zealand are closed for a holiday.

WTI crude futures weakened below $83 per barrel on Thursday, sliding for the second straight session as demand uncertainties caused by delayed US rate cuts weighed on the market. Traders were wary about the prospect that the Federal Reserve will keep rates higher for longer amid a series of strong inflation and employment figures. Markets now look ahead to US GDP data on Thursday and the Fed-preferred PCE price index report on Friday to guide the outlook further. However, official data showed that US crude inventories fell by 6.37 million barrels last week, defying expectations for a 1.6 million barrel build. Meanwhile, supply-side concerns eased as tensions in the Middle East continued to deescalate, with Iran and Israel signaling no further military actions against each other. Oil tankers that were previously held idle due to disruptions in the Red Sea also progressed in their deliveries, easing tightness in foreign markets and allowing economies to build inventories.

US stock futures fell sharply on Thursday as tech giant Meta Platforms plunged about 15% in extended trading after issuing a weak revenue guidance for the second quarter, which outweighed better-than-expected first quarter results. International Business Machines also tumbled 8% missing revenue estimates and announcing plans to acquire HashiCorp. In regular trading on Wednesday, the Dow fell 0.11%, while the S&P 500 and Nasdaq Composite edged up 0.02% and 0.1%, respectively. Those moves came as investors parsed through the latest batch of earnings reports and continued to assess the outlook for US interest rates. Tesla surged 12% after announcing plans to ramp up production and introduce more affordable models. Meanwhile, Boeing fell 2.9% after the company reported its first quarterly revenue decline in seven quarters. Investors now look ahead to more earnings reports and US GDP data on Thursday.

South Korea's economy expanded by 1.3% quarter-on-quarter in March 2024, up from 0.6% growth in the previous quarter, according to advance estimates. It is the largest expansion since December 2021, surpassing expectations of a 0.6% increase. On the expenditure side, private consumption rose by 0.8% (vs +0.2% in Q4), driven by increased expenditures on goods and services. Government consumption also grew, increasing by 0.7% (vs +0.5% in Q4), mainly due to higher spending on goods.Construction investment expanded significantly, growing by 2.7% (vs -4.5% in Q4), with both building construction and civil engineering seeing increases. However, facilities investment declined by 0.8% (vs +3.3% in Q4), primarily due to lower investment in transportation equipment. Exports rose by 0.9% (vs +3.5% in Q4), driven by higher exports of IT items, such as cellular phones. Imports contracted by 0.7% (vs +1.4% in Q4), mainly due to decreased imports of electronic equipment.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) rose by 11bps to 7.24% in the week ended April 19th, 2024, reaching the highest level since the last week of November, according to data from the Mortgage Bankers Association. Mortgage rates have now risen for three consecutive weeks by a total of 33bps, tracking the upward movement of Treasury yields, driven by traders adjusting their expectations for Federal Reserve rate cuts. Meanwhile, the rate for jumbo loans, or the 30-year mortgage for homes sold for over $766,550, rose to 7.45% from 7.4%. The average rate for a 30-year mortgage backed by the Federal Housing Administration was 7.01%, up from 6.9% a week ago.

The Ifo Business Climate indicator for Germany rose to 89.4 in April 2024, marking the third consecutive month of increases and surpassing market expectations set at 88.9. Sentiment toward Europe's largest economy soared to its highest level since May 2023, driven by growing anticipation of potential interest rate cuts by the European Central Bank and a gradual alleviation of inflationary pressures. Companies were less pessimistic regarding the forthcoming months (89.9 vs 87.7 in March), while their assessment of the current business situation also showed a less gloomy stance (88.9 vs 88.1). Breaking down the data by industry, sentiment improved among manufacturers (-8.5 vs -9.9), service providers (+3.2 vs +0.4), traders (-22.0 vs -22.9), and constructors (-28.5 vs -33.2).