Recession fears weigh on commodities amid softening economic data

The stock and bond markets were both headed for their first weekly gain in a month on Friday after investors bet on central banks bringing inflation under control. However, worries about global growth weighed on commodities.

In response to concerns about the path of Federal Reserve policy and whether aggressive rate hikes will trigger a recession, the dollar slipped against its major peers on Friday, on course for its first weekly decline this month.

Japan, Britain, the eurozone, and the United States all reported softer factory activity in June, with US producers reporting the first drop in orders in two years amid slumping confidence. According to Friday's UK figures, British shoppers cut back on their spending in May due to fast-rising inflation. An increase in sales in April was sharply revised down due to the cost-of-living squeeze.

In a report published earlier on Friday, Britain's longest-running consumer confidence survey, the GfK survey, reported the lowest confidence level since records began in 1974.

Events of today

In light of yesterday's positive US close and positive Asia session, European markets will see a positive open today.

A lot of attention will be paid to the speeches by the European Central Bank and the Federal Reserve later in the day. This will be in addition to figures on German business confidence. As the earnings outlook hasn't changed materially since the first quarter, second-quarter earnings reports will likely send shockwaves to the market, adding to concerns of a recession.

German Ifo survey

A recent PMI report pointed out that if the latest German business survey is any indication, the latest figures will struggle to improve from those in May.

Even though May's German IFO number improved to 93, the number from April had been weak. However, it would still be challenging to make a case for a substantial jump in sentiment following the announcement of the German government about gas supplies and the slide in the PMI scores. The expected score for the business climate is 92.8, and the current assessment is 99.