A look at the day ahead in European and global markets from Ankur Banerjee

Investors have hunkered down with their risk-off hat on, after a central bank bonanza this week (that’s seven central banks on Thursday and the Fed on Wednesday, for those counting) made it clear that interest rates will go up in 2023 for most countries as the battle against inflation rages on.

European Central Bank President Christine Lagarde’s forceful hawkish rhetoric has played Grinch, with little sign yet of a Santa rally as we head towards Christmas and the New Year. Asian equities (.MIAPJ0000PUS) look set to end the week in the red, snapping their six-week winning streak, while the U.S. dollar straightened its crown as a safe-haven after a recent wobble.

“The market wanted a metaphorical hug that everything will be OK, but central banks have pushed real rates higher,” said Chris Weston, head of research at Pepperstone.

And so, investors will parse every inch of economic data coming through in the near term to gauge inflationary pressures and recessionary signals, with flash PMI data from the Eurozone and the UK on deck for the day.

China was ramping up vaccinations, especially for the elderly, and building stocks of ventilators, essential drugs and test kits in rural areas as the country braces for a surge in COVID-19 cases, while many city dwellers were planning holidays for the first time since the pandemic began.

The initial exuberant reaction to the dismantling of China’s zero-COVID policy has quickly given way to worries that the world’s second biggest economy may be unprepared for the wave of infections to come.

Nearly 200 Chinese companies, including Alibaba (BABA.N) and Baidu , heaved a sigh of relief after the U.S. accounting watchdog said it has full access to inspect and investigate firms in China, removing the risk that these companies could be booted off U.S. stock exchanges.

Of course, the worry remains on what the audit is likely to reveal, and that has put a lid on gains for these stocks.

Meanwhile, Twitter suspended the accounts of several prominent journalists who recently wrote about its new owner Elon Musk, with the billionaire tweeting that rules banning the publishing of personal information applied to all, including journalists. “Some time away from Twitter is good for the soul,” Musk tweeted.

Key developments that could influence markets on Friday:

Economic events: Nov UK retail sales, Flash PMI data for UK, Eurozone, Sweden’s unemployment rate for November

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