Wall Street opened in the green, after four-straight sessions of losses, as the long Christmas weekend looms. Investors cheered the strong results from Nike and Fedex. However, unless there is a miracle in the last sessions of 2022, investors might not be getting their usual Christmas rally.

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Nobody saw this coming. Overnight, the Bank of Japan amended its yield curve control policy, paving the way for more interest rates hikes. This created a negative butterfly effect on stocks, bonds and the dollar and sent all global indexes in the red this morning, including Wall Street.

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Equity markets have had a second week of decline, which brings them back around their mid-November level. There was a 2.1% drop for the S&P500, -2.8% for the Nasdaq and -1.7% for the Dow Jones. The main driver is still the pivot in the US monetary policy. Investors are trying to guess when the peak of the current rate hike will occur, and at what altitude.

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This was a bad session for equity markets yesterday. Investors were still reeling from Jerome Powell’s speech on Wednesday and took a beating from Christine Lagarde on Thursday. The pro-bounce scenario for stocks that had begun to take shape in recent weeks is unraveling as recession fears mount. It's not the best of entries for this last session of the week, which coincides with the "day of the four witches", when several derivative deadlines telescope. 

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There is no escaping the central banks today, as several monetary policy decisions have just been announced. And the market reaction isn't great since all the main indexes are in the red today. Yesterday, it was the Fed that fired the first shot, adopting a tone that was less accommodative than investors had hoped. As a result, Wall Street lost some ground and will probably have to revise its baseline scenario to make it a little more cautious.

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Let's mention two big topics this morning and a smaller one, although it could also have implications for financial markets. We have of course the countdown to the U.S. central bank's final monetary policy adjustment for the year 2022. After raising rates four times by 75 basis points, the first time this has happened since the 1980s, the Fed is expected to reduce the pace, but without totally releasing the pressure. Verdict this afternoon.

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Things are getting serious today, with the first in a series of important macroeconomic events: Consumer prices. They’ve just been published, and investors can breathe a sigh of relief as they came in better than expected.

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Investors remain cautious at the start of a week full of important economic events. There are only a few stock market sessions left this year, but a lot is going to happen in the next few days. If all goes according to market expectations, four major central banks will raise their key rates by 50 basis points. 

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It's the reading every investor was waiting for, and it ended being rather disappointing. Monthly producer prices data came in higher than expected, which could mean that the Federal Reserve will keep raising interest rates for longer to tame high inflation.

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On stock markets, it's a bit of a complicated week. The recent good news is fizzling out and the markets are dragging their feet in a fourth consecutive session of decline, as investors are uncomfortable with the economic and financial context. For the week, the S&P500 is down -3.4% and the Nasdaq 100 -4.1%. 

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