Existing-home sales in the US fell 4.6% to a seasonally adjusted annual rate of 6.18 million in December of 2021, the lowest in 4 months and below market forecasts of 6.44 million mostly due to low inventory. Each of the four major US regions witnessed sales fall in the last month of 2021. Total housing inventory fell 18% to 910K units and the median existing-home price for all housing types was $358,000, up 15.8% from last year. Considering full 2021 however, sales increased 8.5% to 6.12 million, the highest since 2006. "December saw sales retreat, but the pullback was more a sign of supply constraints than an indication of a weakened demand for housing. This year, consumers should prepare to endure some increases in mortgage rates. I also expect home prices to grow more moderately by 3% to 5% in 2022, and then similarly in 2023 as more supply reaches the market", said Lawrence Yun, NAR's chief economist.

US stocks rebounded on Thursday, with the Dow Jones adding more than 400 points, the S&P 500 rising more than 1%, and the Nasdaq surging 2%. Treasury yields retreated for a second day from recent 2-year highs and traders shifted their focus to corporate results. Earnings from Travelers Companies and American Airlines topped estimates while United Airlines lowered its 2022 growth forecast due to the spread of the omicron variant. Netflix and PPG Industries are due to report today after the closing bell. Meanwhile, initial claims were the highest in 3 months while the Philly Fed manufacturing index came better-than-expected sending mixed signals about economic recovery.

ECB policymakers noted that the recent and projected increase in inflation was largely driven by temporary factors that were expected to ease in 2022 but warned that a “higher for longer” inflation scenario could not be ruled out, accounts from its December 2021 meeting showed. For 2023 and 2024, inflation is projected relatively close to 2% but considering the upside risks, could easily turn out above 2%. At the same time, the central bank reiterated net purchases under the PEPP could be scaled down and discontinued at the end of March but noted that substantial monetary policy support was still needed, thus an interest rate hike this year is highly unlikely.

WTI crude futures extended gains for the fifth straight session to above $87.5 per barrel on Thursday, hovering at seven-year highs, supported by ongoing supply concerns and prospects of strong demand. The International Energy Agency (IEA) on Wednesday said that OPEC+ produced about 800,000 barrels per day (bpd) below its production targets in December, and that the oil market could be in a significant surplus in the first quarter of this year. In addition, heightened geopolitical tensions following an attack by Yemen's Houthis on the United Arab Emirates have also provided some support. On the data front, both the API and EIA reports showed US crude stocks unexpectedly rose last week.

The Central Bank of Turkey paused its easing cycle and left the key one-week repo rate steady at 14% as expected during its first meeting of 2022. Since September last year the bank cut the rates by 500bps, sending the lira to record low levels and putting additional pressure on consumer prices. The central bank said it is monitoring the impact of recent policy changes while the review of the policy framework is being conducted with the aim to prioritize the Turkish lira. Policymakers also expect the disinflation process to start on the back of measures taken for sustainable price and financial stability along with the decline in inflation owing to the base effect.

European stocks pared earlier gains to trade below the flatline on Thursday, as losses in healthcare and technology stocks amid lingering concerns about inflation and growth more than offset gains in mining stocks. China-exposed miners led gains, after the world’s second-largest economy cut its mortgage reference rate for the first time in nearly two years. On the earnings front, STOXX 600 companies are expected to post a 48.6% year-on-year rise in fourth-quarter profit, a marginal uptick from a prior estimate of 48.5%, Refinitiv data showed. On Thursday, Spain's Bankinter reported Q4 net profit above analysts’ estimates. Meanwhile, producer inflation in Germany accelerated for a 12th straight month to a new all-time high of 24.2% in December, above market expectations of 19.4%.