european stock markets managed to claw back early losses to trade just in positive territory although economic worries continued to weigh on investor sentiment at the heart of investor concerns is the fact that inflation remains at a multidecade high which makes the federal reserve and other central bank poised to continue aggressively boosting interest rates and tightening monetary policy the risk is that raising borrowing costs to dent economic demand could spur a global recession if you want the good news this morning its that the first half of the year is now finally over said jim reid a strategist at deutsche bank if you want the bad news its that theres not much good news around as we start the second half and us equity futures are already downin the first few hours of the new half year credit suisse has forecast eurozone gdp growth of 24 in 2022 and 07 in 2023 well below the consensus of 28 and 2 respectively inflation is likely to combine with rapid european central bank tightening and deteriorating external demand to weaken consumption and investment growth credit suisse said adding that inflation is likely to rise further and surprise on the upside forecasting the headline figure to average 75 this year and 3 next a recession is now a clear possibility although still not a given credit suisse said high excess savings and easier fiscal policy should help prevent a recession but there are still potential triggers such as russian gas cuts that would lead to rationing stock futures were sliding as investors entered the second half of 2022 with the same fears that made the first half the worst start to a year since 1970 higher inflation higher interest rates and a higher risk of a us recession in bond markets the yield on the benchmark 10year treasury note ticked up to 2989 from 2973 thursday shares of kohls fell more than 17 in premarket trading after cnbc reported the company terminated talks with franchise group owner of the vitamin shoppe cnbcs report cited two people familiar with the matter barrons has reached out to kohls and franchise for comment on the cnbc report the dollar recently 03 higher against a basket of currencies will continue to outperform as widespread risk aversion drives investors toward safe havens said mufg bank it said the dollars strength has intensified as fears over weaker global growth mount it is difficult to envisage any turn to more favorable market conditions the upcoming earnings season could show worse profits and guidance as companies may no longer see recently robust margins as sustainable said mufg rising natural gas prices due to the war in ukraine could also worsen investor sentiment sterling will remain highly sensitive to global investor risk appetite as the uks external deficit is worsening said mufg bank sterling tends to perform poorly during periods of risk aversion and data on thursday that showed the uk had a record current account deficit in the first quarter suggest the currencys underperformance could continue as financial market conditions will remain challenging in coming months said mufg the overall external position is worsening which leaves the uk more vulnerable at times when risk aversion becomes elevated and capital flows can diminish as investors pull back from financing bond yields were slightly lower in early trading and citi is leaning to the view they may have peaked it feels like yields may have peaked but weve been here before and there are reasons to be anxious german bunds remain very sensitive to spot inflation data but have now overshot softening mediumterm inflation anchors by a distance cit said it finds a trading range of 115 for the 10year bund yield fairer than a range between 152 societe generale remain bearish on german bunds targeting the 10year yield at 2 in the second half of the year on assumption that the european central banks hawkishness hasnt peaked yet furthermore if fiscal policy in the eurozone continues to stimulate demand instead of prioritizing targeted and supplyside measures the ecb eventually may be forced to hike rates above the neutral level socgen added that this isnt priced in by the market currently the narrowing of the 10year italian btpgerman bund yield spread by more than 40 basis points and the morethan 80bp drop in the 10year btp yield since the ecbs ad hoc meeting without the central bank buying yet more btps seems encouraging said commerzbank this tightening however also underscores the risk of setbacks if the ecb fails to meet high expectations about its planned antifragmentation tool at the july meeting they add while italy could still afford higher yields investor sentiment will be crucial as italy will have to attract new investors again next year said commerzbank the ecb will start applying flexibility in pepp reinvestment allocations as of july 1 but this flexibility might not be sufficient to prevent a continued widening of country spreads said societe generale it considers a frontloading of reinvestments unlikely while reallocating all redemptions from core countries to peripheral countries seems difficult to implement in practice the ecbs planned antifragmentation tool details of which are expected to be unveiled at the july policy meeting is likely to slow down spread widening and help control spread volatility which is a precondition before raising interest rates socgen said oil futures were lower and remained on course for their third consecutive weekly loss as recession fears continued to weigh on demand concerns are rising that central bank tightening and soaring inflation will weigh on global growth and push the us and other major economies into recessions reducing demand for oil the interweek collapse in oil price reflects growing recessionary concerns said spi asset management oil prices have risen too quickly and mounting risk of a recession is putting a cap on prices spi said read putin orders sakhalin energy to be transferred to new russian company copper and gold prices were weaker with safehavens such as the dollar and bonds boosted as markets remained risk off copper prices were at their lowest level since february 2021 as recession fears continued to hit demand for the red metal recession concerns have gained the upper hand and weighed on metals prices said commerzbank the lme base metals index has plunged by 25 in the past three months and finds itself at its lowest level since april of last year this was also the most pronounced quarterly loss in nearly 14 years silver prices remained down over 13 from the start of the year and at their lowest level since july 2020 and ubs expects the metal to test prepandemic lows amid rising us rates a stronger dollar and increasing us recession risks ubs said we think fundamental conditions are also falling into place for silver prices to reach prepandemic levels in short we expect prices to test 19 an ounce ubs advised against adding silver exposure and to hedge their long silver positions over the next six months fitch said iron ore prices may moderate in the second half as steel inventories have been building up the longer it takes for construction and manufacturing sectors in china to reopen the more likely it is that steel margins will come under pressure and some capacity is curtailed putting pressure on iron ore prices eu targets foreign subsidies aiming at china but worrying us companies brusselseuropean union lawmakers struck a political agreement on new rules for companies that reap financial benefits from governments outside the bloc pushing forward a proposal that sparked concern from some us business groups the regulation under a deal reached late thursday primarily targets companies from china and elsewhere with government backing it would allow the european commission the eus executive body to block such businesses from making certain acquisitions or winning large public contracts if they previously benefited from foreign subsidies that regulators deem to be distortive siemens investment in siemens energy could hurt 3q earnings by eur28b siemens ag said thursday it could see a noncash impairment of about eur28 billion 292 billion on its investment in siemens energy ag siemens ag said that with the closing share price of siemens energy on germanys xetra the market value of siemens ags 35 investment in siemens energy is significantly below the book value siemens energy shares thursday closed at eur1399 down about 43 sodexo sa on friday backed its guidance for the financial year after reporting a strong third quarter the french foodservices and facilities company posted revenue of 552 billion euros 579 billion for the quarter up from eur448 billion the year prior it said that a minus 17 hit from acquisition and disposals was more than compensated by a strong positive currency impact of 66 through the strength of the us dollar and the brazilian real julius baer gruppe ag said it agreed to settle a litigation case dating back more than a decade that sought hundreds of millions of euros in compensation the swiss private banking group said friday that it would pay 105 million euros 1101 million through existing provisions while the remaining amount will be charged against its firsthalf results