US GDP growth is expected to show a sharp slowdown in the first quarter due to COVID-19. Reporting season is feverishly underway, and yesterday’s update from Facebook owner Meta Platforms* will provide a positive start to the day. Economic leader Caterpillar also reported strong results, but the main event comes a little later: it’s reports from Apple and Amazon. The Bank of Japan pushed the yen to a 20-year low as it once again refused to act on rising inflation. Sweden’s central bank, on the other hand, began a long cycle of rate hikes. The standoff between Europe and Russia over gas supplies escalated as Italy’s Eni agreed to a demand to pay for gas in rubles. Here’s what you need to know about the financial market on Thursday, April 28.

1. OMICRON PUT PRESSURE ON U.S. GDP

The US is expected to report a sharp slowdown in its economic growth in the first quarter as a result of the resurgence of COVID-19 with its new Omicron strain, which has put much of the economy on hold for longer than expected at the start of the year.

The figures, released at 08:30am ET (12:30pm GMT), are expected to show GDP growth slowing from 6.9% in the fourth quarter to 1.1% year-on-year. Based on past experience, these numbers are likely to be revised upward in subsequent releases, as traditional data collection methods have not fully adapted to changes in work practices during the pandemic.

At the same time, the U.S. Department of Labor will release weekly jobless claims data. There have been few signs of easing labor market tightness in recent weeks amid widespread evidence that companies are struggling to hire new workers.

2. THE BANK OF JAPAN CUT THE YEN TO A 20-YEAR LOW

The Bank of Japan cut the yen to a 20-year low, redoubling efforts to keep long-term government bond yields well below inflation.

The BOJ pledged after its regular monetary policy meeting to continue buying an unlimited amount of 10-year government bonds to defend an implicit 0.25% yield cap, signaling its determination to focus on supporting the fragile economy. The dollar rose 1.3 percent and crossed the 130-yen mark for the first time since April 2002.

It also brought the dollar index, which tracks its exchange rate against a basket of 6 advanced-economy currencies, to within half a percent of a 20-year high. The dollar also continues to rise against emerging currencies, with the dollar gaining 0.8% against the offshore Chinese yuan to an 18-month high.

However, it has not been a one-way move. The Swedish Krona rose across the board as the Riksbank raised its repo rate by 0.25% and flagged another series of hikes to come over the next 2 years. The Euro remained under pressure after the release of data showing that core inflation remained strong in April.

3. META SET FOR GAINS AT THE OPEN; APPLE AND AMAZON REPORTS WILL BE THE MAIN EVENTS OF A BUSY DAY

Facebook-owned Meta Platforms* returned vigor to the U.S. stock market with its quarterly report, which showed an unexpected increase in users, which was taken as a sign that Instagram’s Reels feature is reasonably capable of competing with TikTok. However, the 6.6% year-over-year revenue growth was still the slowest in the company’s history on the stock exchange. Meta shares were up 16.7% on the premarket.

Qualcomm shares did well on the premarket, rising 7.6% after the chip maker’s strong quarterly report, and Ford shares were up 2.2%.

By 06:15 a.m. ET (10:15 GMT), Dow Jones futures were up 283 points, or 0.8%, while S&P 500 futures were up 1.4% and Nasdaq 100 futures were up 2.0%.

Apple Inc and Amazon.com Inc are wrapping up the reporting season among Big Tech companies after the close of trading as Apple needs to reassure the market that iPhone production in China won’t be too badly affected by restrictions due to COVID-19. For Amazon, the focus will be on whether its cloud business can protect its advantage over Microsoft and whether its retail business can handle rising shipping costs.

4. CATERPILLAR BEATS EXPECTATIONS, BUT INFLATION THEME RUNS THROUGH CONSUMER GIANTS’ REPORTS

The stream of earnings reports continues with unrelenting intensity, and a wide range of companies from all sectors of the economy continue to report.

Caterpillar, considered by many to be a leader in the broader economy, reported quarterly earnings about 10% above expectations at $2.88 billion, while pharmaceutical giant Merck raised its full-year forecast after a strong start to 2022.

Consumer giants Altria) and McDonald’s will give important forecasts before the market opens, while Unilever and Danish brewer Carlsberg warned that input cost inflation will get worse before things improve Shares in mining company Glencore) rose after cutting production forecasts for the important battery metals copper and cobalt.

Meanwhile, Samsung reported its strongest first quarter since 2018.

5. EU GAS COMPANIES FAIL TO WITHSTAND RUSSIAN PRESSURE

The standoff between Europe and Russia over energy supplies intensified as the European Commission warned companies in the EU not to comply with Russia’s demands to pay for gas in rubles.

Italian oil and gas giant Eni is reportedly one of 10 European buyers of gas from Gazprom who have applied to open a ruble account with Gazprombank to meet Russia’s demand that they pay in Russian currency rather than euros or dollars. The EU Commission warned that this would violate existing sanctions on Russia.

Benchmark European gas futures fell 4.6 percent to 102.5 euros per megawatt-hour. Analysts interpreted the conflict over gas supplies as a “warning shot” against larger European customers in Italy and Germany.

* Meta Platforms is banned in Russia and recognized as extremist