The Bundesbank said on Monday that it expects the German economy to shrink markedly in the autumn and winter months amid reduced or rationed energy consumption, as reported by Reuters.

German central bank further noted that that the economy would still likely contract even if outright rationing was avoided. 

Market reaction

Markets remain risk-averse during the European trading hours on Monday with Germany's DAX 30 losing nearly 1% on the day. Meanwhile, EUR/USD was trading at 0.9980 at the time of writing, down 0.4% on a daily basis.