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Investors have recently put fears 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.”
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.”

Not to be missed: Also on the calendar is Federal Reserve Chair Jerome Powell’s testimony before Congress on the US economy, which takes place Wednesday and Thursday.

Expect Powell to get grilled on where the Fed goes after three straight “insurance” cuts to interest rates. But he’s also likely to face questions on weak manufacturing and business investment data — and what it tells us about the strength of the world’s biggest economy.

Up first: The United Kingdom will report GDP data on Monday. 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% growth between July and September.