Stocks across the global financial markets took a hit after a week of rate hikes from central banks around the world, with the Fed and ECB signalling more pain to come.  The Dow Jones closed down 764 points (-2.25%). At best it was up -193, and at worst it was down -950. The S&P 500 fell 2.49%, and the NASDAQ was down 3.23%. In Europe, Stoxx 50 -3.5% FTSE -0.9% CAC -3.1% DAX -3.3%. SPI Futures are down 71 points (-1.06%). Hard contraction from Wednesday’s rally.

It was a complete reversal of the CPI rally we had early in the week overnight. Markets went risk-off, and the USD Index rallied with the hopes of the Fed cutting rates next year slashed. But Morgan Stanley’s chief economist is not buying the Fed’s latest message and sees a peak rate of 4.50-4.75%, and rate cuts late in 2023. US bond yields fell again despite the risk-off market sentiment and rallying USD. The 10-year yield was down 4.9bps and the 2-year yield was down 1.5bps. The USD Index rose 0.71%, and the Aussie Dollar fell 2.38% to 66.99c.

The Bank of England and the ECB have joined the party with a 0.50% rate rise each. Both had raised rates by 0.75% at the previous meeting. The BOE’s target rate is now 3.5%, a 14-year high, while the ECB’s target rate is 2%, which is also the highest since 2008. BoE is expected to peak rates at 4.25% and the ECB is expected to peak at least at 3%.

• ASX to plunge, Dow tumbles as soft landing hopes fade.
• YourGrocer collapses, capping disastrous year for delivery firms.
• Commodity market returns next year to rival 2021.
• Wall Street tumbles as Fed sparks recession fears.
• ECB slows rate hikes but pledges more to keep up inflation fight.
• U.S. retail sales fall after hefty gains; labor market still tight.
• Biden blacklists China's YMTC, crackdowns on AI chip sector.
• Oil prices slid 2% as dollar firms and central banks hike interest rates.
• Gold broods over Fed's higher-for-longer rate hike stance.
• JPMorgan to convert another $2 billlion of mutual funds to ETFs.
• Musk cashes out another $3.6 bln in Tesla stock.
• Ukraine general says Russia digging in for long war.

Catch up on all the latest with Henry Jennings on today’s Pre-Market Podcast.

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