Investors have recently left worries about the pace of global growth aside, opting for optimism on a “phase one” US-China trade deal. But muted economic data expected out of Europe this week could change the mood.
Germany may post data Thursday indicating that it’s in recession. Economists surveyed by Reuters believe the world’s fourth largest economy shrank 0.1% between July and September — marking two straight quarters of negative growth.
It’s possible that Germany — which has been hit by the trade war, as well as falling global demand for autos — just dodged a bullet. Exports unexpectedly rebounded in September, rising 1.5% compared to the previous month. August data was also revised upward.
“With today’s data, a technical recession is not yet a done deal,” Carsten Brzeski, ING’s chief German economist, told clients, noting that Germany could have avoided another contraction “at the very last minute.”