The European Central Bank (ECB) followed through with their 75bpts rise last night but it wasn't anywhere near the 100bts hike some analysts were expecting. We looked through the statement and found some caution, with an admission that "there are clear signs of an economic slowdown" on the horizon. 

We cautioned on this earlier this month in our note titled Interest rate pivot could come in 2023 as data starts to soften

The ECB news follows the Bank of Canada which increased rates by 50bpts compared to 75bpts, again not as high as market expectations and surprising many.

The Europeans and Canadians join Australia's central bank which was the first among the majors to surprise on the downside when they hiked by only 25bpts earlier this month. 

Bottom line: There's a small but important consensus building that perhaps interest rate rises will start to flatten out and even pause early to mid next year.

We know that inflation is problematic, but that's all in the rearview mirror and savvy policymakers are looking forward to the inevitable fall in economic activity.

We've already seen Facebook and Amazon disappoint in their earnings this week, falling 15-25%. They are great bellwethers for what is to come.