In its monthly economic report published on Monday, Germany’s central bank, the Bundesbank, said that the German economy is likely to shrink again this quarter while facing a touch recovery in the first quarter of 2024.

Key quotes

"Economic output is likely to once again decline slightly in the fourth quarter of 2023.”

"The German economy is set to recover only arduously from the period of weakness that has persisted since the outbreak of war against Ukraine."

"Tentative signs of a slight improvement after the turn of the year are beginning to emerge.”

"The underlying trend in new orders suggests that foreign demand may have bottomed out."

“There is no evidence of a sustained improvement in global industrial activity.”

Market reaction

EUR/USD is unperturbed by the findings of the Bundesbank report, currently trading at 1.0930, up 0.19% on the day.