A look at the day ahead in markets from Julien Ponthus.
Investors on recession watch learnt little they didn't already know from the world's top central bankers gathered at the European Central Bank's annual conference in Portugal.
Fighting inflation is the top priority and avoiding a recession comes second, they made clear, with U.S. Fed Chair Jerome Powell acknowledging that some "pain" would be involved in the process.
"Certainly, there's a risk", central banks will tighten monetary policy too quickly, Powell told an audience well too aware of the risks involved in fighting a historic inflation surge.
And indeed, the first half of 2022 constitutes the worst semester for Wall Street's S&P 500 since the 2008 financial crisis and even beats Black Monday's H2 1987, which saw the benchmark fall by 18.7%.
With just one session left to go, the U.S. index is set for a decline of 20% over the past six months, a plunge, matched only twice during the past 50 years.
Now, with fast-dropping consumer morale and the U.S. economy contracting more than previously estimated in the first quarter, the question is: how deep is the bottom of this bear market?
Well, by the look of Asian markets ending the quarter in a sombre mood and plunging European and U.S. stock futures this morning, the future doesn't look promising.
What happens if investors, who bought a net $195 billion of stocks this year despite the selloff, suddenly head for the exits if earnings expectations are finally revised downwards?
Macro data is also weakening. Japan's factory output posted its biggest monthly drop in two years while New Zealand business sentiment fell again in June.
Key developments that should provide more direction to markets on Thursday: - China's factory, service sectors shake off 3 months of lockdown pain - OPEC+ meets with little prospect of pumping more oil
- Swiss May retail sales down 1.6% yr/yr - UK posts record current account gap, economy grew as previously thought in Q1 - Kraft Heinz pulls products from UK retailer Tesco in pricing row - Germany May retail sales, May import prices, June unemployment data, June preliminary CPI - U.S. PCE index - Colombia central bank meeting - Swedish Riksbank meeting; Monetary policy report to be published at 0730 GMT
(Reporting by Julien Ponthus)