Europe's corporate recession is expected to deepen, the latest forecasts show, as companies struggle with uncertainties from Brexit, the protracted U.S.-China trade spat and Germany's manufacturing recession.

Companies listed on the STOXX 600 regional index are now expected to report a drop of as much as 3.7% in third-quarter earnings, worse than the 3% fall expected a week ago, I/B/E/S data from Refinitiv showed.

Earnings that grew by 14.4% in the same quarter a year earlier are seen posting their worst EPS since Q3 2016 when earnings fell 5%.

Consensus for revenue improved slightly with forecasts for flat growth, compared with a fall of 0.3% seen last week. Revenue rose 5.9% a year ago and grew by 3.3% in Q2.

Excluding the energy sector, Q3 earnings are expected to fall just 0.3% with revenue increasing 3.1%, the data showed.