Germany and the United Kingdom will both post economic data this week amid fears two of the world’s largest economies are teetering on the brink of recession.
Economists surveyed by Reuters believe Germany, the world’s fourth largest economy, shrank 0.1 percent between July and September — marking two straight quarters of negative growth. Germany will reveal its economy data on Thursday.
It’s possible that Germany — which has been hit by the trade war, as well as falling global demand for autos — will have dodged a bullet. Exports unexpectedly rebounded in September, rising 1.5 percent 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.”
Recession or not, the reality is that Germany’s economy, the largest in Europe, looks very weak. A reminder of that could give investors a jolt.
“The fact remains that the German economy has been in de facto stagnation for more than a year,” Brzeski said. “This is clearly nothing to become too cheerful about.”
The United Kingdom will report its GDP data on Monday (local time). The country’s economy shrank for the first time since 2012 in the second quarter as global growth and Brexit fears loomed large — but economists polled by Reuters think the country will narrowly avoid a recession by notching 0.4 percent growth between July and September.
Meanwhile, the Australian share market is expected to open higher today.
The SPI200 futures contract was up 27.0 points, or 0.40 per cent, at 6,726.0 at 0700 AEDT, suggesting a positive start for the benchmark S&P/ASX200 today.
On Wall Street on Friday, the Dow Jones Industrial Average finished up 0.02 per cent, the S&P 500 was up 0.25 per cent and the tech-heavy Nasdaq Composite was up 0.48 per cent.
The Aussie dollar is buying 68.62 US cents from 68.82 US cents on Friday.
